Transforming
the European
transportation
industry
Creating our industry’s
first digital platform
Strategic Report Corporate Governance Financial Statements 1
EUROWAG Annual Report and Accounts 2023
Financial highlights
Sustainability targetsOperational highlights
Net revenue*
€256.5m
+34.4%
+14.5% organic*
50%
reduction of carbon emissions
from own operations by 2030
-10.9%
18,379
average number of active
payment solutions customers
+8.4%
Adjusted EBITDA margin*
42.4%
-0.4pp
-0.9pp organic*
20%
reduction of customers’ carbon
emissions intensity by 2030
-0.5%
40%
female representation in
“all people leaders” group
by 2025
+4pp
93,882
average number of active
payment solutions trucks
+6.5%
Basic earnings per share
(cents/share)*
(6.62)
Contents
Strategic report
Contents and KPI
highlights
Chairman’s statement
Our history
Investment case
Market overview
Industry trends
At a glance
Our services
Our integrated digital
platform
Business model
Chief Executive Officer’s
review
Our strategy
KPIs
Section 172
Financial review
Risk management
Viability statement and
Going concern
Sustainability
TCFD
Non-financial and
sustainability
information statement
Governance
Chairman’s introduction
to governance
Board of Directors
Corporate governance
report
Nomination and
Governance Committee
report
Audit and Risk
Committee report
Remuneration report
Directors’ report
Financial statements
Independent Auditors’
report
Consolidated financial
statements
Notes to the consolidated
financial statements
Company financial
statements
Notes to the Company
financial statements
Other information
Glossary
Company information
2023 €256.5m
2023 18,379
2023 42.4%
2023 93,882 2023 4,353 tCO
2
e 2023 73.9 gCO
2
e/tkm 2023 35%
2022 €190.9m
2021 €153.1m
2022 16,950
2021 15,020
2022 42.8%
2021 45.5%
2022 88,189 2022 3,439 tCO
2
e 2022 70.7 gCO
2
e/tkm 2022 31%
2021 82,640 2021 2,667 tCO
2
e 2021 71.2 gCO
2
e/tkm 2021 28%
2022 2.41
2021 1.54
Adjusted basic earnings
per share (cents/share)*
6.49
+12.8%
-6.8% organic*
2023 6.49
2022 5.75
2021 5.77
Loss before tax*
€(39.3)m
Adjusted profit before tax*
€56.7m
2022 €28.0m
2021 €17.7m
Notes:
1. tCO
2
e or tonnes of carbon dioxide equivalent.
2. From baseline year 2019.
Please refer to the Sustainability section on page 51 for a full explanation.
* Please refer to the Financial review on page 32 for a full explanation of highlights, including organic, and to Note 11 of the Financial statements for a definition of the alternative performance measures.
Highlights
Strategic Report Corporate Governance Financial Statements2
EUROWAG Annual Report and Accounts 2023
Continued delivery for our stakeholders
Chairman’s statement
Dear fellow shareholders,
During 2023, the Group continued to deliver
robust growth despite macro pressures, during
a period of economic instability in the European
markets. The macro factors included the
continued war in Ukraine, the conflict in the
Middle East, high interest rates and inflation,
which have impacted the CRT industry through
a slowdown in freight demand. Our purpose to
help the CRT industry become clean, fair and
efficient is becoming increasingly important.
Eurowag continues to make significant
progress towards developing an integrated
digital platform and securing its position as a
leader in the digitisation of the CRT industry.
Delivering growth
I am delighted that, through an environment of
economic instability, the Group was able to
deliver double-digit organic growth in 2023.
The continued performance against the
multi-year background of macroeconomic
headwinds across Europe demonstrates the
resilience of Eurowag’s business model.
M&A and integration
I was pleased that our Company was able to
complete the acquisition of Grupa Inelo S.A.
(“Inelo”) during March 2023. Inelo’s presence
in Central and Eastern Europe (“CEE”) as a
provider of integrated transport technology to
the CRT industry will allow our Group to build,
scale and strengthen our footprint in the core
markets of Poland and Slovenia.
During the year, Eurowag completed the
integration of WebEye Telematics Zrt
(“Webeye”), which was acquired during the
summer of 2022, including the alignment of
sales forces into a single agile team. The
ongoing work to integrate Inelo is prioritising
cross-sell opportunities and the consolidation
of the product line and will continue
throughout 2024.
Digital platform
Our M&A strategy has been directed to the
development of our digital platform and the
Group has made significant progress towards a
single end-to-end digital platform where
customers can access all Eurowag’s services.
The platform is supported through establishing
a data platform that improves our data and
analytics, and reporting governance which
will be important for customers as the
industry digitises.
Strategic Report Corporate Governance Financial Statements 3
EUROWAG Annual Report and Accounts 2023
Confidence in the Eurowag team
I would like to extend my gratitude, and that of
our Board, to Eurowag’s employees for their
contribution, dedication and hard work during
2023, and without whom the Group’s
achievements would not have been possible.
The success of our Group in the past year and
for the future is due to the people that made it
possible, which is increasingly true as Eurowag
continues to grow and deliver on its promises
through difficult macro conditions.
Environmental, social and
governance (“ESG”)
commitments
Our Board remains committed to Eurowag’s aim
to help the CRT industry become clean, fair
and efficient. That ambition is supported by our
climate and sustainability targets which were
set during 2021 and 2022 and complemented
by robust governance and a strong belief in our
goal from our employees.
I encourage shareholders to read more in our
Engaging with stakeholders section on page 28
and the Sustainability section which includes
our reporting against the Task Force on Climate-
related Financial Disclosures (“TCFD”) targets,
on page 51 of this Annual Report and Accounts.
You can also find more information in our
Sustainability report, available on our website.
Board changes
During the year, there were several changes to
Chief Financial Officer, and we welcomed Oskar
Zahn to the role. Caroline Brown, who chaired
our Audit and Risk Committee, stepped down as
Independent Non-Executive Director and Steve
Dryden joined us as Independent Non-
Executive Director, taking on the responsibility
of chairing the Audit and Risk Committee.
Subsequent to the year end, we welcomed
Sophie Krishnan and Kevin Li Ying to the Board,
as Independent Non-Executive Directors.
Susan Hooper is stepping down from the Board
at the Annual General Meeting (“AGM”) in May.
I would like to thank Magdalena, Caroline and
Susan for their contribution to the Board and
the Company as a whole.
The future
Looking forward to 2024, our Board will ensure
that we continue to deliver on the commitments
made during, and since, our IPO. Our Company
continues to grow its addressable market whilst
strengthening its market position. In 2024, the
Company’s focus continues to be on the
integration of acquisitions, the Q4 soft launch
of the digital platform, and management of
debt, which has grown following the acquisition
of Inelo.
Paul Manduca
Chairman
Eurowag continues to make significant progress towards
developing an integrated digital on-road platform.“
Our history
Strategic Report Corporate Governance Financial Statements4
EUROWAG Annual Report and Accounts 2023
Journey to an integrated digital platform
Payments
Key:
Payment provider for energy
and toll payments
Digital provider
of services
Payments and
financing provider
End-to-end integrated
digital platform
Products
and services
Financing
Load and
dispatch
Integration 2023+Accumulation 2017-2022 Expansion 1995-2016
Delivering an industry-first, end-to-end integrated
platform, driving efficiency and supporting
decarbonisation
@
AI, data and connectivity at the heart of value creation
@
Cross-selling centric design
@
Scalability via strong digital and indirect original
equipment manufacturer (“OEM”) sales channels
Digital provider of services
@
Acquiring and developing a broader suite of services,
with data at the core
@
Evolving strategy to address key CRT challenges
@
Focusing on mission critical products for our customers
@
One-stop shop for data solutions
@
Piloting systems integration
Payment provider for energy and toll payments
@
Building customer loyalty as a fuel card and toll
payments provider
@
From regional to leading CEE player
@
Pan-European fuel and toll proprietary network
@
Providing credit limits to our fuel card customers
Investment case
Transforming our industry
The CRT industry is still very analogue, with complex administrative tasks, inefficient
processes and operators that do not have access to technology or data insights and
have little to no access to working capital. All these inefficiencies lead to pollution, in
1
.
1
An industry in need of transformation
Y
Page 6
2
Trends in our markets
Y
Page 7
3
Connecting a fragmented industry
Y
Page 8
4
Payment solutions
Y
Page 10
5
Mobility solutions
Y
Page 12
6
An integrated digital platform
Y
Page 14
7
A fair and low-carbon future
Y
Page 51
Note:
Strategic Report Corporate Governance Financial Statements
EUROWAG Annual Report and Accounts 2023
5
Proven track record of growth
Resilience through business cycles
With around 30% net revenue and adjusted EBITDA CAGR over
five years
Significant market opportunity
With €9 billion addressable market today
Integrated digital platform will unlock significant value
for our customers and industry
Improvements in revenue, cash flow and carbon reduction
Robust business model
With around 42% adjusted EBITDA margin
Market overview
The European CRT industry plays an essential role in
the economy. It serves as the pillar of the logistics and
supply chain network, and it provides for 20 million
jobs across Europe
1
, from manufacturers to logistics
professionals, drivers, retailers and administrative staff.
It serves as the primary means of transportation of goods across the
2
), and it is
vital for international trade, while also contributing to regional and economic
development. The CRT industry significantly contributes to the gross
domestic product (“GDP”) of European countries and trucks play a key role
in connecting manufacturers, suppliers and consumers. There are over 9
million commercial vehicles in Europe
3
, ranging from light vehicles (under 3.5
tonnes) to heavy (over 12 tonnes).
The size of the European CRT market
Analogue
<13%
of road transport
companies are
digitised
4
Complex
30+
administrative tasks
for every journey
Low
utilisation
30%
of trucks on the road
are empty
6
Fragmented
>90%
of operators are small
and medium-sized
enterprises (“SMEs”)
and lack access
to technology and
data insights
5
Low
profitability
3-5%
margins
Constrained
Limited
access to finance
restricts earnings
potential
Environmental
impact
>7%
of greenhouse gas
emissions (“GHG”)
in Europe
7
An industry in need of transformation
Notes:
1. Source: Eurostat/internal company estimate.
2. Source: CVDD, page 40, issued 05/2021, BSG.
3. Source: IHS Markit Vehicle Parc, 01/2021.
4. Source: BCG Digital Acceleration Index.
5. Source: Eurostat.
6. Source: Internal company estimates.
7. Source: https://op.europa.eu/en/publication-detail/-/
1
Strategic Report Corporate Governance Financial Statements6
EUROWAG Annual Report and Accounts 2023
~5%
of European GDP
~20m
CRT-related jobs in Europe
26%
of CRT trucks in Europe are based in CEE
Number of CRT trucks in Europe
Share of CRT trucks in CEE
9.1m
CRT trucks
Industry trends
Trends in our market
Trend Description How we respond
Market disruption
and complexity
The geopolitical situation, influenced by the Russian invasion of
Ukraine and more recently the war in the Middle East, high
inflation and interest rates, has led to a decrease in product
manufacturing and demand, which in turn has affected the
overall number of kilometres driven.
With a long history spanning almost 30 years, we have become a trusted partner to our
customers, through our mission critical product offering, which provides reliability and
operational and financial visibility.
Digitalisation
While the adoption of digital technologies to optimise routes,
tracking and fleet management has been slow, operators are
seeing its advantage, as digitalisation will bring enhanced
efficiency and cost savings.
We are focused on developing an integrated digital platform that consolidates our services
into a single digital office. This will allow customers to manage their operations more
efficiently and automate daily tasks. We are also focused on scaling up our digital payment
solutions with real-time processing and fraud prevention, facilitating better financial
planning and operations management. By providing real-time data and analytics, we enable
customers to identify areas for improvement, enhance profitability and reduce costs.
Sustainability
There has been an increased focus on corporate sustainability
reporting and due diligence practices. Ongoing regulatory
developments relating to CO
2
emissions standards and
measurements for CRT are aligned with the European Green Deal
and initiatives to address climate change.
We leverage data and AI to enhance efficiency, and our solutions accelerate the prosperity
of our customers in a low-carbon future. By simplifying operations, increasing profitability
and eliminating inefficiencies, our solutions empower customers to invest in sustainable
practices and retain more value.
Regulation
The CRT industry is heavily regulated, with stricter mobility
packages being introduced that focus on adoption of cleaner
technologies, compliance with emissions standards and safety
standards for drivers.
We ensure full regulatory compliance across VAT returns, toll operations and
measurement and calculation of CO
2
emissions, through our comprehensive customer
operations knowledge.
2
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7
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Connecting a fragmented industry
At a glance
We connect business owners, drivers,
dispatchers and accountants with
merchants in the fuel and alternative
energy networks, toll and tax
authorities, and other roadside and
mobility (data-centric) service providers.
To meet the requirements of our customers, we
offer a comprehensive range of products that
simplifies the complexities and fragmentation
inherent in the CRT industry. Our established
cross-sell strategy reinforces this offering, aiming
to establish lifelong customer relationships.
Strategy Enablers
P
e
o
p
l
e
S
u
s
t
a
i
n
a
b
i
l
i
t
y
Attract
Be in every truck
Engage
Drive customer centricity
Monetise
Grow core services
Retain
Expand platform
capability
Y
Read more on
page 23
Y
Read more on pages 10,
14, 29 and 51
Employees across all countries
~1,800
Access provided across Europe:
Fuel stations
~13,000
Our purpose
To help make the CRT industry
clean, fair and efficient
P
r
o
d
u
c
t
T
e
c
h
n
o
l
o
g
y
3
Strategic Report Corporate Governance Financial Statements 9
EUROWAG Annual Report and Accounts 2023
Countries in which we operate
Fuel customer and fuel merchant
EETS
3
VAT refund
Fuel customer only
1
Fuel merchant only
2
Fuel merchant, fuel customer, EETS and VAT refund
Customers
Products and services
Energy and tolls
Fleet management
Financing
Transport management
Roadside services
Tax refund
Work time management
Loads
Sales channels
Direct DigitalIndirect
Pricing
Data and Internet of Things (“IoT”)
Notes:
1. Fuel customer countries: countries from where Eurowag customers originate.
2. Fuel merchant countries: countries where Eurowag has an acceptance network.
3. The European Electronic Toll Service (“EETS”) is designed to enable the payment of tolls through a single contract, a single
EETS provider and a single vehicle device throughout the EU. In Sweden and Denmark, EETS is provided only on bridges.
Digitising the industry with
an end-to-end platform
Contribution to Group net revenue
2023
57.0%
2022
70.7%
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EUROWAG Annual Report and Accounts 2023
Payment solutions
1
Energy payment solutions
We resell traditional and alternative fuel across Europe through
our Eurowag fuel card, which also allows our customers to pay
for tolls and roadside services. At the end of 2023, we had a
total of around 13,000 stations across 25 European countries.
As we continue to focus on supporting our customers in the
transition to alternative fuels, at the end of 2023 we had a total
of 387 liquefied natural gas (“LNG”) stations, which represents
more than half of the European market. Our compressed natural
gas (“CNG”) network had 184 stations.
2
Toll payment solutions
Similar to our energy payment solutions, our toll solution offers
our customers the option to pre- or post-pay on European toll
road networks. Through our enhanced vehicle assistant (“EVA”)
on-board unit (“OBU”), our customers can use one device to
navigate EETS, while at the same time taking advantage of our
other integrated services, such as fleet management and
fraud prevention.
During 2023, we saw an almost four times increase in devices
sold, compared to 2022. We have EETS licences in Germany,
Belgium, Austria, Poland and bridges in Sweden and Denmark,
and this year we received certification for Czech Republic,
Hungary, Spain and Portugal. We continue to apply for EETS
licences across Europe, and can provide tolling services in 23
countries and five major tunnels across Europe, and co-operate
with 80 partners.
Our services
The payment solutions segment represents the largest
energy payments through pre- or post-paid fuel cards
and toll payments. This is usually the first introduction
our customers have to our services.
Y
Visit www.investors.eurowag.com/what-we-do/payment-solutions
4
Notes:
1. Liquefied natural gas is natural gas that has been cooled down to liquid form.
Natural gas burns significantly cleaner and produces lower emissions of sulphur,
nitrogen and carbon dioxide into the atmosphere.
2. Compressed natural gas is a natural gas under pressure that remains odourless,
clear and non-corrosive. Therefore, it is a greener, cheaper and more efficient fuel.
Cost savings
An integrated product package minimises
operational costs.
Customer benefits:
Efficiency gains
Through streamlined processes, such as
receiving all invoices from one source and
automated processing of invoices,
customers save time and effort and can
focus on core business activities.
Enhanced security
Through the integrated free fraud
protection system in all EVA OBUs,
customers are safeguarded against
potential financial losses.
Convenience
Through a simplified billing system and
central ecosystem, customers’
administrative burdens are reduced.
Sustainability
Through increasing efficiency in fuel and vehicle utilisation, our customers can save costs
and reduce their GHG emissions.
Strategic Report Corporate Governance Financial Statements 11
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Creating efficiencies
for our customers
customers into our ecosystem. Once they sign up, we can
relevant to them, either related to smart routing, toll or tax refund
services. Once the customer starts using multiple products,
we can create a customer value proposition that allows them to
Case study
Contribution to Group
net revenue
work time management, transport management, location-
Y
Visit www.investors.eurowag.com/what-we-do/mobility-solutions
2023
43.0%
2022
29.3%
Strategic Report Corporate Governance Financial Statements12
EUROWAG Annual Report and Accounts 2023
1
Fleet management solutions
Through our fleet management solutions, dispatchers and
drivers gain insight into their vehicles. By monitoring
maintenance schedules and tracking fuel usage, driving times,
loads and other metrics, they can improve efficiency, which in
turn leads to reductions in costs and emissions, thus ensuring
an environmentally conscious approach to fleet operations.
2
Work time management
We offer work time management through Inelo’s proprietary
software, which allows analysis and settlement of drivers’
working time. In 2023, an average of more than 4,200
customers and more than 56,000 drivers used the service
monthly, and we held training webinars for transport companies
with over 10,000 participants.
3
Transport management
Through Inelo’s transport management software, users can
plan transportation routes, delivery co-ordination and driver
control. Through order acceptance, monitoring delivery, and
settlement and reporting, the software streamlines end-to-end
order management, and automates all logistics processes.
4
Location-based products and services
Through Sygic, we offer smart navigation products, location-
based services and mobile navigation apps. The Fuelio app,
powered by Sygic’s routing algorithms, shows all fuel stations
along the route, accompanied by advanced filtering options.
Users can now access detailed information regarding fuel
prices at each station along the route, including average prices
per country or specific station brands.
5
Tax refund services
Our tax refund services are available to customers in the 27 EU
member states, as well as in the UK, Norway, Turkey, Serbia
and North Macedonia. The services include tax refund on
standard VAT, partial excise duty refund, pre-financed VAT and
advanced payment of excise duty.
Mobility solutions
5
Our services continued
Strategic Report Corporate Governance Financial Statements 13
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CRT companies face numerous challenges, from regulatory
compliance to lack of efficiency. Through our Inelo acquisition,
management software in a cohesive support system.
Customer benefits:
@
Streamlined operations
comprehensive view that allows them to
manage their operations seamlessly. They
can streamline processes, from regulatory
compliance to freight management, which
in turn improves overall efficiency
@
Enhanced regulatory compliance –
for regulatory support, companies can
ensure they stay compliant with the
ever-changing regulations within the CRT
sector. This will reduce the risk of penalties
and disputes with authorities
@
Improved planning and execution –
planner and the transport management
companies can optimise routes, monitor
vehicle status and automatically update
order status
Mobility integration
powered by Inelo
Case study
@
Automated workflows
many new features in 2023, including
efficient load allocation through the planner
and advanced map features. By automating
tasks such as route editing, load allocation
and order management, companies can
reduce manual effort, minimise errors and
accelerate the decision-making process
@
Increased revenue and customer
satisfaction
all products in their operations, transport
companies can see increased revenue
opportunities, as they can handle more
orders, attract new customers and
communication, transparency and
improves service quality and
customer loyalty
Strategic Report Corporate Governance Financial Statements14
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Our integrated platform will allow
carriers to use one integrated
application for most of their
business activities.
Historically, all these products would have been
sold by single providers, with little to no digital
integration, making the lives of small and
medium-sized transportation companies
difficult and inefficient. All of the products and
services we have acquired or built over time
generate a unique set of data from every point
of our customers’ journeys. Putting all of these
data points onto one application allows us to
develop meaningful customer insights and
therefore provide transformative digital tools for
customers which will fundamentally transform
their businesses and, as a consequence, the
CRT industry. This platform will eradicate the
inefficiencies an drive improvements in
revenues and cash flows and, more importantly,
by reducing the number of empty trucks on the
road, we will help bring down the amount of
carbon emissions produced across the
whole industry.
Sales channels
Direct
Pricing
DigitalIndirect
Products and services
Energy and tolls
Financing
Fleet management
Transport management
Roadside services
Work time management
Tax refund
Loads
Customers
Business owner Fleet dispatcherTruck driver
Merchants, partners,
authorities and shippers
Data and IoT
Driver
information
Geo-localisation
Destination
and routing
Trucks and
trailer data
TransactionsTax refund Behaviours
An integrated digital platform
Our integrated digital platform
6
Our digital platform roadmap
@
Map customer journeys
@
Design and develop digital channel touch points
@
Collaborate with automotive OEMs to integrate the new
navigation app
@
Integrate business services required for pilot
@
Prepare freemium business model and premium pricing
@
Continue to improve integrated front end to
support customer journeys
@
Roll out digital sales channel across Europe
@
Develop functionality to support an indirect
sales channel
@
Continue to develop integrated business services
@
Continue to evolve pricing models, including new
bundled subscription
@
Create a service-oriented architecture and governance
@
Develop technology platform components required
for pilot
@
Implement a new enterprise resource planning (“ERP”)
system and migrate data
@
Develop new integrated data platform
@
Continue closing the gap with the existing solutions
@
Develop rich analytics and AI tools for customer insights
@
Decommission old legacy ERP systems
@
Discontinue old legacy websites, apps and hardware
@
Design and certify new integrated hardware OBU
Design and pilot phase Live phase
Soft launch in
Q4 2024
FY 2024
FY 2025
Product
Technology
Strategic Report Corporate Governance Financial Statements 15
EUROWAG Annual Report and Accounts 2023
After many years of building and acquiring
various mission critical data services, we
are excited to launch the industry’s first
digital platform in FY 2024, which will bring
transformational benefits to our customers.“
Martin Vohánka
Motivation
@
Run a profitable business, while being able to
pay commitments
@
Establish long-term relationships with partners,
ensuring consistent work whilst remaining
competitive
@
Secure employees’ income, be a trusted
employer and provide good working conditions
Frustration
@
Increasing fuel costs
@
Increased costs due to unforeseen challenges
whilst on the road
@
High driver turnover
@
High expectations from partners and limited
data availability
Carlos
Fleet owner
Motivation
@
Is able to make decisions
@
Receive agreed salary on time and bonus for
driving efficiently
@
Minimise waiting times at stops, borders
and in traffic
Frustration
@
Poor conditions of truck parks from rest places,
food and sanitation
@
Too many administrative tasks
@
Hard to keep track of mandatory compliance
requirements
@
Continuous waiting hours (border crossing,
traffic jams)
Viktor
Truck driver
Motivation
@
Responsible for daily operations regarding
relevant routes
@
High utilisation for the trucks she is responsible for
@
Help drivers with their daily work
@
Manage everything within normal working hours
Frustration
@
Dependency on driver behaviour discipline and
vehicle conditions
@
Multiple apps to use
@
High responsibility
@
Always needs to be available
Isabella
Dispatcher
Strategic Report Corporate Governance Financial Statements16
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Case study
Customer benefits of one application
Strategic Report Corporate Governance Financial Statements 17
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Platform benefits:
Fleet owners
@
Manage their business more efficiently, have
better communication with their employees and
make timely business decisions
@
Fast access to financing, working capital
management and self-service tax refund services
Dispatchers
@
Monitor vehicle utilisation, transport planning and
route management from one application
@
Access to all the necessary data, without having
to switch between systems or paper
@
Fewer manual processes and faster decision
making through the use of AI tools and better
data insights
Truck drivers
@
Improve driving behaviour and driving time,
through better navigation and truck utilisation
@
Ease the burden of administrative tasks
@
Better visibility of regulatory obligations
@
Be part of a community
Strategic Report Corporate Governance Financial Statements18
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How we generate revenue
Business model
Smart routing
@
Subscription based and
lifetime licence fees
Other adjacent
services
@
Various
Transport
management
@
Subscription based
Payment solutions
(57% contribution to net revenue)
Mobility solutions
(43% contribution to net revenue)
Fleet management
@
Subscription based
Work time
management
@
Subscription based
Energy payments
@
Number of transactions (x)
average unit per transaction (x)
fee per unit
Toll payments
@
Processed volume (x)
Tax refund
@
Processed volume (x)
Recurring subscription and other fee-based revenue streamsRecurring and transaction-based revenue streams
Growing our business
Historically, customers are drawn into our ecosystem through fuel. Once they
sign up, we leverage data insights to recommend other products in an offering
tailored to their needs, which includes toll, transport and fleet management,
work time management, tax refund services or smart routing.
As customers start engaging with more products, we will produce a customer
value proposition that highlights the advantages of having all services in the
same place, thus increasing stickiness and customer loyalty.
Strategic Report Corporate Governance Financial Statements
EUROWAG Annual Report and Accounts 2023
19
Pan-European fuel network
@
Our fuel card is supported at
around 13,000 stations
across Europe
@
Strong relationships with fuel
suppliers across Europe and
continued focus on growing our
alternative fuel acceptance
network
Mission critical data to
support SME businesses
@
Almost half our revenues come
from data-centric products
@
We capture data across every
touch point of our customers’
journey, and we leverage our
insight into the CRT industry’s
needs, to help our customers
transition towards a net zero future
@
Supporting the digitisation of
the industry
Speed and efficiency
@
One-stop shop – we can support
our customers with most of their
business needs, including one
bill for all their products
and services
@
Our toll EVA OBU can be used in
23 countries across Europe,
keeping our customers’
trucks moving
@
Customers process their tax
refunds digitally, saving them
money and time
@
Our smart routing calculates the
fastest and most efficient route
for a truck, including the
cheapest fuel along the route
@
Our driver behaviour feature
identifies opportunities for
emissions and cost savings
Trusted and loyal brand
@
Almost 30 years in the industry
@
Offer financial solutions for
customers who have working
capital needs
@
Net Promoter Score (“NPS”) of
41.8, increasing from last year
@
Build lifelong relationships – the
more services taken, the lower
the churn
Customers
Engaging our customers in
product development is an
ongoing process that involves
interviews, problem definition,
collaborative idea generation,
implementation, and
measurement using customer
insights and metrics.
Y
Read more about Eurowag’s
interaction with customers
on page 28
Suppliers
Retaining and attracting vendors
is essential for our business
success, allowing us to offer
competitive prices and high
quality, while also ensuring that
environmental and social issues
are properly managed.
Y
Read more about Eurowag’s
interaction with suppliers on
page 29
Employees
Our purpose and values guide
every decision. With a culture
that emphasises diversity, we
foster a wide range of skills.
We support employees in
self-development through
various initiatives.
Y
Read more about Eurowag’s
interaction with employees
on page 29
Investors
Our business model, driven by
resilient growth, creates value
for shareholders.
Y
Read more about Eurowag’s
interaction with investors on
page 30
Society and the
environment
Committed to making the CRT
industry clean, fair and efficient,
we support our customers to
make more carbon efficient
journeys and drive initiatives that
support our short and long-term
decarbonisation goals, aligning
our operations to EU net zero
targets, whilst also focusing on
giving back to our communities.
Y
Read more about Eurowag’s
interaction with society and
the environment on page 30
Policy makers, regulators
and government
We engage with regulators to
ensure compliance with relevant
requirements. We closely
monitor policy and regulatory
developments in Europe and
our key markets.
Y
Read more about Eurowag’s
interaction with policy
makers, regulators and
government on page 31
How we enable value creation Value created for stakeholders
Strategic Report Corporate Governance Financial Statements20
EUROWAG Annual Report and Accounts 2023
Chief Executive Officer’s review
Industry pioneers creating a digital future
Dear readers, dear friends of Eurowag,
The European road transport industry
;
and provides
employment to 20 million people. Despite the
scale and importance of this industry in Europe,
trucking companies face many challenges today,
and only a few companies make an effort to
resolve them. At Eurowag, we focus on nothing
else but tackling these challenges at their root
cause and are fully committed to supporting
the transformation of the trucking industry into
a resilient service for society, that contributes
to Europe’s journey to net zero by 2050. That
is what drives our passion and commitment to
undertake truly pioneering ventures. Our vision
is about the digitisation of the industry,
which will solve the ecosystem fragmentation,
decarbonisation and low profitability, and
create a better workforce environment.
Transforming the business
For almost 30 years, Eurowag has built a
pan-European payment network for the
trucking industry, which is mainly made up of
small and medium-sized businesses. Five years
ago, when we had around 900 employees, we
changed the strategy of the business and
started to build or buy new product
capabilities, creating unique pieces of a jigsaw,
which none of our competitors had attempted
before. We made a bold move and decided to
bring multiple sub-industries together, all
serving the trucking industry, bringing
products under one roof to create a single
independent ecosystem. Our ambition is to
create an end-to-end platform where we can
bring together all our customers’ data, be it
truck, driver, or company data, instilling
transparency and generating AI insights to
drive efficiency through the ecosystem,
reducing human intervention, improving drivers
wellbeing and truck utilisation and saving
energy. As well as bringing data together, this
platform will integrate our payment solutions,
which supports customers’ cross-border
foreign exchange transactions, and where
financing is at our customers’ fingertips.
Today, with almost 1,900 employees working
intensively towards our vision, I am proud to
report significant progress on all our strategic
pillars, pivoting towards a soft launch of our
platform in Q4 2024, while delivering a strong
set of results against macro headwinds and
industry volatility.
Notes:
1. Source: CVDD, page 40, issued 5/2021, BSG.
2. Source: Eurostat.
Strategic Report Corporate Governance Financial Statements 21
EUROWAG Annual Report and Accounts 2023
Our financial and
operating highlights
For the full year, total net revenues grew by
is supported by mobility solutions which grew
adjusted EBITDA margins were broadly flat with
year being our peak year for transformational
investments. These results showcase that our
customer value proposition is differentiated from
the rest of the market represented by single or
limited product providers. Overall the Group
reduction primarily relating to amortisation from
acquired intangibles, finance costs and a
This year, we saw slow growth in economies
across Europe; there were headwinds in the
spot freight markets and less kilometres
driven, and yet we were still able to grow the
number of active payment solutions trucks and
respectively. At Eurowag, however, it is not
unusual to see accelerating demand for our
solutions when customers are struggling, as
our solutions are mission critical for their
businesses and help improve their financial
positions. These trends are not dissimilar to
what we saw in 2008, and more recently
As communicated, our transformational capex
programme is largely complete however we will
continue to invest and we expect our capex
People and culture are the
foundation to Eurowag’s success
In Q2 2023, we welcomed a new CFO, Oskar
Zahn, who brings strong plc experience, and
we are pleased to see him set new standards
for the finance function, while adapting to the
complex environment of Eurowag’s operations.
We have continued to strengthen the Eurowag
leadership team, especially through our recent
acquisitions of Inelo (including CVS Mobile
(“CVS”)) and Webeye, moving senior talent into
Group roles, to promote and align our culture
across the organisation. As a result of our
growing organisation, we have also continued
our efforts to improve and strengthen internal
communications, as so many people with
different backgrounds and cultures come
together. We have introduced new
communication formats, such as Town Halls and
All Hands meetings, where employees have
exposure to the Senior Leadership Team and
our Chairman, as well as different parts of the
business. Our focus on two-way communication
supports our aim of having an inclusive and
open culture. We have also launched a People
and Culture Ambassadors Network whereby
40 colleagues representing different parts of
our organisation are helping us to embed our
culture, help employees understand our purpose,
live our values and understand our strategy
and the part they play in making us successful.
We have continued to improve diversity in the
workplace, with a key pillar of our strategy
focusing on hiring and promoting practices.
Attention has been given to improve the
training of our hiring managers in areas such
as unconscious bias. We have also focused on
our Women’s Network and supporting women
in leadership roles, for example launching a
women’s mentoring scheme.
Similarly, we have focused on creating an
inclusive learning environment where
employees have access to a wide range of
opportunities to develop personal and
professional skills.
Acquiring product capabilities
to support our customers and
new platform
In March 2023, we completed the acquisition of
Inelo, which represented a significant milestone
for the Group. Firstly, it was the largest
acquisition for Eurowag and gave us market
leadership in Poland, which is the biggest
transport market in Europe, allowing us to grow
our footprint in the Adriatic region under the
CVS brand. Secondly, the solutions we
acquired, work time management and transport
management, have completed the list of
mission critical services Eurowag set out to
build or acquire five years ago, to become a key
part of our future platform.
During the year, we continued to work on a
phased integration of Webeye, which we
acquired in 2022. As of 1 January 2024, all our
acquired businesses will have been working
under one Eurowag operating model, so we
can start to generate both cost and revenue
synergies, driven through cross-sell
opportunities. Both the Inelo and Webeye
acquisitions have already contributed to strong
OBU sales, which grew almost four times in the
year. This is a great example of where our
ability to capture data from both vehicles and
drivers gives us customer insights to cross-sell
a number of our other value-added services.
After many years of building
and acquiring various mission
critical data services, we are
excited to launch the industry’s
first digital platform in FY 2024,
which will bring many benefits
to our customers.“
Building the industry’s first
digital platform, with a soft
launch in Q4 2024
During 2023, we focused on expanding our
sales channels. In preparation for our platform
launch, we invested heavily in our digital
channel capabilities and continued to expand
our partnerships with the truck manufacturers,
resulting in three of the six European OEMs
signing with us to further develop our platform
so they can install it within their infotainment
systems. These three OEMs represent around
presents a unique opportunity for truck
manufacturers to offer advanced digital
services at the point of sales; customers have
immediate access to solutions enabling
operational efficiency and decarbonisation.
These deals provide Eurowag with limitless
access to new customers across Europe,
endorsed by partnerships with strong brands
of truck manufacturers.
Strategic Report Corporate Governance Financial Statements22
EUROWAG Annual Report and Accounts 2023
As Eurowag moves to more of a technology
enabled business, away from a pure card
payment business, we expect to shift our
marketing strategy from a pure direct sales
customer model to a digital and indirect sales
customer model. As part of this process, we
have become a proud partner of leading
industry influencer and truck business owner
Ms Iwona Blecharczyk. Iwona is a passionate
promoter of Eurowag and a great ambassador
for all truck operators and drivers in the public
eye, but most importantly she is helping shape
respective legislation with European authorities.
Although we are well on our way to becoming
more technologically focused, we continue to
invest in our core suite of products. In 2023,
we expanded our energy network to Portugal
and Croatia, whilst continuing to focus on
supporting our customers’ transition to
alternative fuels; our LNG stations’ coverage
network. Our mobile payments application is
now available in 13 countries across Europe,
helping to enhance our customers’ digital
experience. The number of monthly active
compared to last year, as a result of better
user experience and increased communication
efforts with our customers. We look forward to
migrating the Road Lords drivers’ community to
our new platform. In the year we expanded our
EETS network to the Czech Republic, Hungary,
Spain and Portugal, while our European
coverage for toll services is 23 countries.
Our technology investment also includes the
implementation of ERP, which is a critical part of
our technology platform, enabling us to improve
internal processes and scale our business.
We are pleased to report we completed the
second phase of the implementation at the
beginning of 2024, which included general
ledger and Group reporting processes.
At the same time, we continue to develop our
financial platform capability, in preparation
of our e-wallet solution, as both technologies
are an important part of the new platform.
Sustainability
We are committed to helping the CRT industry
become clean, fair and efficient.
Our sustainability plan contains four focus
areas: climate action, customer success and
wellbeing, community impact and responsible
business. We have set objectives and targets
for each focus area, and in 2023 we have
made good progress against them.
We are committed to playing a role in enabling
the CRT industry to achieve decarbonisation
goals. This means helping customers be more
efficient and make the transition from fossil
fuels to alternative energy solutions, as well as
reducing our own emissions. In 2023, we
baseline year 2019, and almost doubled our
on-site renewable energy generation by
installing solar panels. We have also seen a
across Eurowag’s customer fleet, compared to
increase in the number of active alternatively
fuelled commercial vehicles, which reached
780. We have begun offering lower carbon fuel
on our own truck parks and have continued
adding to our acceptance network of HVO,
bringing the total to 165 in seven countries,
which represents a six times increase.
Chief Executive Officer’s review continued
The future belongs to those who
learn and collaborate
At Eurowag, our success story has been built
by people with open minds, those who are
eager to learn from every step of our journey.
We have innovative teams and skillsets to
create valuable products and services for our
customers. In all our efforts we are mindful of
all our stakeholders, be it our shareholders,
customers and employees, or our environment,
suppliers, communities, local governments or
even future generations. Despite the macro
and industry pressures we face, we will
continue to pursue our dream of revolutionising
the CRT industry and lead the way to a digital,
low-carbon future. We are confident we have
all necessary ingredients to achieve this, and I
want to thank you for the support.
Martin Vohánka
Notes:
3. Baseline year recalculated to include Webeye and Inelo.
4. Commercial vehicles using fuels or power sources which
serve, at least partly, as a substitute for fossil oil sources.
Strategic Report Corporate Governance Financial Statements 23
EUROWAG Annual Report and Accounts 2023
Progress in 2023
@
Signed three out of six OEM partnerships
the European truck market today
@
Integrated the Webeye sales team into
one Eurowag agile sales team, aligning
sales targets across all markets
@
Through the acquisition of Inelo, we
expanded our presence in Poland and
the Adriatic region
@
Expanded our energy network into
Portugal and Croatia
Focus in 2024
@
Training the direct sales teams to
become more advisory, including further
integration of Inelo’s sales team
@
Start to bring together all our sales
channels into a customer-centric
omnichannel
@
Deliver software to OEM partners
for installation in all new truck
infotainment system
@
Expand customer base in new geographies
@
Integration of electric vehicle (“EV”) charging
points into our closed-loop network
Progress in 2023
@
Improved our Eurowag app and client
portal; number of monthly active users
year-on-year, to almost 32,000
@
Rolled out our mobile payments
application to 13 countries, and now
have over 800 acceptance points
ready for drivers to unlock the fuel
pump with the app
Focus in 2024
@
Streamline customer digital touch points
across all brands into a single sign-on
@
Enhance customer user experience
through simplification and development
of customer insight tools
@
Further develop our driver behaviour
and emissions tracking tools to
help customers with their carbon
emissions efficiencies
Progress in 2023
@
Received EETS certification in the
Czech Republic, Hungary, Spain and
Portugal, and now have licences in 10
countries across Europe, including
toll revenues in Europe
@
Increased the number of toll domains
ordered on our EVA device by six times
year on year, with toll coverage across
23 European countries
@
With the acquisition of Webeye and
Inelo, our toll OBU sales have grown
almost four times year on year
Focus in 2024
@
Drive cross-sell across existing services
and newly acquired businesses
@
Develop Decarbonisation as a
Service to help customers access
lower carbon fuels
@
Expand core services through increased
European coverage
Progress in 2023
@
Implemented new ERP system and on
track with the second phase go live
in Q1 2024
@
Continued to develop our financial
platform capability, in preparation of
our e-wallet launch in FY 2024
@
Made good progress on our digital
platform, testing pricing models and
user journeys; on track for a soft launch
in Q4 2024
Focus in 2024
@
Successful migration of data and
simplification of processes in ERP; next
phase to be launched later in 2024
@
Successful soft launch of our new digital
platform, Eurowag Office, in Q4 2024,
along with our e-wallet solution
@
Introduce subscription pricing model
through new platform
Delivering on our ambitions
Our strategy
Key
1
Product demand decline risk
2
Fuel supplies risk
3
EETS compliance risk
4
External parties’ dependencies risk
5
Technology security and resilience risk
6
Personnel dependency risk
7
Climate change risk
8
Physical security risk
9
Regulatory and licensing risk
10
Clients’ default risk
11
Processes execution risk
12
Liquidity risk
2023 strategic priorities
Links to risk
1
3
4
5
6
7
9
10
11
12
Links to risk
1
3
4
5
6
7
9
11
12
Links to risk
1
2
3
4
5
6
7
8
9
10
11
12
Links to risk
4
5
6
7
9
11
12
Attract
Be in every truck
Engage
Drive customer centricity
Monetise
Grow core services
Retain
Expand platform capability
Strategic Report Corporate Governance Financial Statements24
EUROWAG Annual Report and Accounts 2023
Clear long-term ambitions set
Attract
Today
@
@
@
Ambition
@
digitally
@
@
1 million active trucks, of which
Monetise
Today
@
@
financed through Eurowag
Ambition
@
payments and financing
@
financed through Eurowag
Engage
Today
@
Highly analogue industry
@
Lack of tools for job optimisation
@
Low profitability
Ambition
Customer benefits
@
truck
@
@
Up to 20 tonne annual reduction in CO
2
emissions per truck
Retain
Today
@
@
subscription revenues
Ambition
@
from subscription
@
from financing
Our strategy continued
Strategic Report Corporate Governance Financial Statements 25
EUROWAG Annual Report and Accounts 2023
Measuring our performance
Key Performance Indicators
Financial KPIs
Net revenue
1
(€m)
2023 256.5
2022 190.9
2021 153.1
256.5
+34.4%*
+14.5%* organic
About this KPI
Net revenue represents
revenues from contracts with
customers less cost of energy
resold to customers. The
Group believes this measure is
relevant to an understanding
of the Group’s financial
performance on the basis that
it adjusts for the volatility in
underlying energy prices. FY
2023 organic revenue growth
excluding acquisitions was
Adjusted basic earnings per
share
1
(cents/share)
2023 6.49
2022 5.75
2021 5.77
6.49
+12.8%*
-6.8%* organic
About this KPI
Adjusted basic EPS is
calculated by dividing adjusted
earnings attributable to
ordinary equity holders of the
parent entity by the weighted
average number of ordinary
shares outstanding during
the period.
Adjusted EBITDA margin
1
2023 42.4%
2022 42.8%
2021 45.5%
-0.4pp*
-0.9pp* organic
42.4%
About this KPI
Adjusted EBITDA margin
represents adjusted EBITDA
for the period, divided by net
revenue. FY 2023 organic
EBITDA margin excluding
Notes:
1. This is an APM; a reconciliation to IFRS measures can be found in Note 11 of the Notes to Financial statements.
2. Organic growth for the year represents Group growth, excluding Inelo and related synergies and integration expenses.
Loss before tax (€m)
2022 28.0
2021 17.7
Adjusted profit before tax
€56.7m
(39.3)
About this KPI
The year-on-year decline was
impacted by amortisation from
acquired intangibles, finance
costs, a non-cash goodwill
other adjusting items.
Excluding this, adjusted profit
Basic earnings per share
(cents/share)
2022 2.41
2021 1.54
(6.62)
About this KPI
The year-on-year decrease
was predominantly due the
Group reporting a loss for the
full year 2023 related to a
non-cash goodwill impairment
year, reflecting
macroeconomic pressures
and slowing net revenue
growth during the annual
impairment review.
Strategic Report Corporate Governance Financial Statements26
EUROWAG Annual Report and Accounts 2023
Operational KPIs
Average number of active
payment solutions customers
Average number of active
payment solutions trucks
Number of payment
solutions transactions (m)
2023 18,379
2022 16,950
2021 15,020
2023 93,882
2022 88,189
2021 82,640
2023 37.4
2022 35.2
2021 32.5
18,379
+8.4%*
93,882
+6.5%* +6.3%*
37.4
About this KPI
Number of payment solutions
active customers represents
the number of customers who
have used the Group’s
payment solutions services in
a given period, calculated as
the average of the number of
active customers for each
month in the period.
About this KPI
Number of payment solutions
active trucks represents the
number of customer vehicles
that have used the Group’s
payment solutions services in
a given period, calculated as
the average of the number of
active customer vehicles for
each month in the period.
About this KPI
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.
Key Performance Indicators continued
Note:
Strategic Report Corporate Governance Financial Statements 27
EUROWAG Annual Report and Accounts 2023
Sustainability KPIs
2023 73.9 2023 4,353 2023 35% 2023 780
2022 70.7 2022 3,439 2022 31% 2022 353
2021 71.2 2021 2,667 2021 28% 2021 262
-0.5%** -10.9%** 4pp* 121.0%*
About this KPI
The KPI represents a weighted average
performance of the last 12 months across
the Eurowag portfolio equipped with
telematics units for measuring distance,
fuel consumption and vehicle weight. It is
calculated as the total emissions in
CO
2
e divided by the total weight of the
specific truck multiplied by the total
kilometres travelled. It is expressed as
mass of CO
2
e per tkm.
About this KPI
This KPI represents the total emissions
expressed in tonnes of CO
2
e for a given
calendar year from direct operations
by the GHG Protocol.
About this KPI
This KPI represents the percentage of
female people leaders with at least one
subordinate in the last month of the
calendar year.
About this KPI
This KPI represents the number of
alternative heavy-duty or light
commercial vehicles using fuel or power
sources which serve as a substitute for
fossil oil sources, with at least one Group
transaction in the last month of the
calendar year.
Y
Please refer to the Sustainability section for further information on the Sustainability KPIs
Customers’ GHG emissions intensity Carbon emissions from own operations Diversity, equity and inclusion (“DEI”) –
female representation
Alternatively fuelled commercial
vehicles using Eurowag solutions
73.9 gCO
2
e/tkm 4,353 tCO
2
e 35% 780
Notes:
** Growth compared to baseline year 2019.
Strategic Report Corporate Governance Financial Statements28
EUROWAG Annual Report and Accounts 2023
Section 172
Engaging with
our stakeholders
In accordance with the factors listed in Section
172 of the Companies Act 2006, the Directors
provide the following statement that describes
how they promote the success of the Group
for the benefit of its members by engaging
with key stakeholders to better inform their
decision making.
Eurowag puts stakeholder considerations and
sustainable business practices at the heart of
its purpose: making the CRT industry clean, fair
and efficient. The Non-Executive Directors of
the Board were formally appointed in September
2021. The Board delegates certain engagement
responsibilities to individual Non-Executive
Directors and to the Senior Leadership Team,
who provide the Board with updates on
stakeholder developments and interests. This
helps inform the Board in its decision making,
including the development of business strategy.
The Board recognises that proactive and
two-way dialogue with stakeholders is critical
to the Group’s long-term success.
The content that follows highlights Eurowag’s
engagement with its key stakeholders
during 2023.
Customers
Relationship description
Our business success depends on our ability
to retain existing and win new customers.
Responsible person
Chief Commercial Officer
Key topics of interest for
stakeholders
and Board’s focus
@
Pricing actions in Poland, which led to
product shortages
@
Digital transformation: after establishing
the capabilities and accumulating learnings
from direct digital end-to-end customer
acquisition in 2022, the Company started
to explore an omnichannel approach, where
direct digital channel and traditional
channel sales are synchronised, each
channel concentrating on the customer
segment that is best suited for the channel
@
Competition
@
Workforce availability, including drivers
@
Regulatory burden and business costs in
home markets and cross-border
@
Health and safety on the road
@
Availability of parking
@
E-tolling changes in Poland
@
Rising fuel prices linked to the geopolitical
driven energy disruption
How we engaged in 2023
@
Customer insight panels: we have
successfully expanded our customer
database to over 400 contacts, who are
willing to actively participate in diverse
research projects and activities, through
interviews and testing
@
Focus groups: during 2023, we led a
brand awareness study targeting 500
non-customers across five strategic
research projects and 30 individual
in-depth interviews were conducted
with both current Eurowag customers
and prospective customers
@
Indirect sales through leads generated by
third-party relationships
@
Co-creation and collaboration workshops
for existing and new products
Considerations and outcomes in 2023
@
Insights to support the development of our
products and services
@
Qualitative interviews expanded from the
Czech Republic and Slovakia to Poland,
Hungary, Romania, Bulgaria, Spain and
Portugal. We have collected around 20,000
responses from 25 online quantitative
questionnaires, achieving a response rate
of approximately 10%
@
Planning additional motivation strategies for
insight panel and focus group participation
@
Continuing to support customer safety and
wellbeing (please refer to our sustainability
@
@
Strong focus on proactive reaction to
customer complaints, improving quality
of our services and customer service
@
NPS now a KPI element of annual bonus
targets and remuneration
Strategic Report Corporate Governance Financial Statements 29
EUROWAG Annual Report and Accounts 2023
Suppliers Employees
Relationship description
Our business success relies on a resilient
supply chain and our supplier relationships.
Responsible person
Senior VP for Energy
Key topics of interest for
stakeholders and Board’s focus
@
Grey players active on the European
market, with uncompetitively low prices
@
Geopolitical risk (including war in Ukraine,
@
International sanctions against Russia
and Belarus
@
Product availability
@
Industry trends: potential impact of
energy transition
@
Digital transformation
@
Rising fuel prices and impact on
credit limit
How we engaged in 2023
@
Regular meetings with energy vendors
@
Regular meetings with key
corporate suppliers
@
Participation in industry conferences
Considerations and outcomes in 2023
@
Connected new vendors to our
acceptance network (traditional and
@
@
Extended bunkering sites network
@
Added hydrotreated vegetable oil
@
Secured bunkering volumes
@
Compliance with legal requirements
@
Self-sanctioning rules related to the
Russian war in Ukraine
Relationship description
The skills, experience and commitment
of our employees are key to the success
of the business.
Responsible person
Chief Human Resources Officer
Key topics of interest for
stakeholders and Board’s focus
@
Post-merger integration
@
Flexible working arrangements
@
Business change
@
DEI in the workplace
@
Cultural alignment
@
Two-way communication
How we engaged in 2023
@
Chairman, and Town Halls focused on
financial results
@
functional area led by the Senior Leadership
Team and its management teams
@
specific areas of the business, such as Group
Product News, Group Commercial News
@
@
Employee engagement event at Prague
Eurowag Chairman, and Board members
@
Employee engagement surveys and feedback
@
Women at Eurowag network launch,
meeting and events
@
Bi-weekly newsletters and intranet
announcements
@
Chief Executive Officer and Chief Human
Resources Officer regular country visits
@
Employee-led corporate social
our community impact in the Sustainability
@
International Women’s Day event, where
we were joined by Board member Sharon
Baylay-Bell
Considerations and outcomes in 2023
@
and engagement survey results review
@
Focus on cultural change, purpose,
strategy cascade and values
@
Focus on two-way communication with
the introduction of new channels, greater
executive visibility, and regular follow-up
and measurement
@
Diversity and inclusion strategy
implemented and women in leadership KPI
targets measured and tracked
@
Culture Champions award that recognises
our colleagues for living our values
Strategic Report Corporate Governance Financial Statements30
EUROWAG Annual Report and Accounts 2023
Section 172 continued
Investors Society and the environment
Relationship description
The support of our investors is critical
to the delivery of our business ambition.
Responsible person
Head of Investor Relations and
Communications
Key topics of interest for
stakeholders and Board’s focus
@
Capital expenditure, particularly
digital transformation and
technological investment
@
Debt leverage following recent
acquisitions
@
Cash flow
@
Competitive landscape
@
How macro headwinds impact our
business model
@
recent acquisitions
@
Share liquidity
How we engaged in 2023
@
@
Participation in investor conferences
and roadshows across the UK, Europe
and the US
@
Two new analyst initiations, taking
coverage to seven analysts
@
@
Investor and analyst visits to the
headquarters in Prague to meet the Senior
Leadership Team
Considerations and outcomes
in 2023
@
Updated investor communications,
event for investors and analysts
@
Extended analyst coverage to broaden
communications channels
@
Increased our investor engagement,
holding 270 investor meetings in the year,
up from 130 the year before
@
Updated our near-term guidance to reflect
macro pressures and recent acquisitions
@
Introduced Oskar Zahn, our new
Chief Financial Officer, to the
investment community
Relationship description
We rely on communities, society and the
environment, and our ambition is to deliver a
clean, fair and efficient industry.
Responsible person
VP of Sustainability and CSR
Key topics of interest for
stakeholders and Board’s focus
@
Changing stakeholder expectations and
regulatory requirements
@
Development of Eurowag’s net zero
commitments and action plan
@
Impacts, risks and opportunities within
ESG-related topics
@
Board, Executive and Senior Leadership
Team climate training
@
Human rights risk management
@
Sustainability action plan development
and delivery
@
Non-financial reporting and disclosure
@
Development of sustainability KPIs in
Group refinancing
How we engaged in 2023
@
Further developed financial quantified
assessment of climate risk, building on
our scenarios
@
Active public affairs engagement plan and
relationships with trade associations
Considerations and outcomes
in 2023
@
Board climate training
@
Sustainability Action Plan refresh and
employee engagement (please refer to
@
Human rights training for all employees
and Board members
@
CSR programme (read more about our
community impact in the Sustainability
@
Near-term carbon reduction and
long-term net zero targets embedded into
work plans, with performance monitored
quarterly by the Executive Committee
Strategic Report Corporate Governance Financial Statements 31
EUROWAG Annual Report and Accounts 2023
Notes:
1. Hydrotreated vegetable oil is a biofuel made by the
hydrocracking or hydrogenation of vegetable oil. These
methods can be used to create substitutes for gasoline,
diesel, propane, kerosene and other chemical feedstock.
Diesel fuel produced from these sources is known as
green diesel or renewable diesel.
2. Based on several decisions by the European Court of
General for Taxation and Customs Union is preparing, in
co-operation with a dedicated working group, guidelines
regarding the treatment of fuel cards and fuel card
transactions from a VAT perspective. The most important
question is whether the fuel card issuer acquires the right
to dispose of tangible property as owner and based on this
assessment, whether the transaction will be treated from a
VAT perspective as commission or supply of goods.
Policy makers, regulators and government
Relationship description
Relationships with policy makers, regulators
and governments support our ability to manage
our reputation and licence to operate in our
chosen markets. We also use our role to
educate policy makers on the specifics of our
industry and to influence change for the
improvement of our customers and markets.
Responsible persons
General Counsel, VP of Sustainability and
CSR, VP of Legal and Compliance
Key topics of interest for
stakeholders and Board’s focus
@
Evolving policy and legislation relating to
corporate sustainability, due diligence,
decarbonisation of the CRT industry, and
related reporting requirements in Europe
and key markets
@
Engagement with the Financial Conduct
authorities with respect to acquisitions
@
Dialogue with representatives of the EU
Commission, Council and Parliament, and
representatives of member states on
several topics
@
Payment Services Directive review
@
International sanctions against Russia
and Belarus
@
State regulations of margins and price
caps for petroleum products
@
Czech National Action Plan for Clean
How we engaged in 2023
@
Participation in several international and
local trade associations:
@
@
Association
@
providers
@
Association
@
Electronic Toll and Interoperable Service
@
– toll management association
@
Transport
@
Transport Operators
@
Engagement with FCA as a publicly listed
company on the London Stock Exchange
@
Engagement with the Czech National Bank
as a payment services provider
@
Dialogue with EU legislative bodies and
representatives of member states on
several topics:
@
Implementation of Vega case decision
2
@
Legislative proposals on new Payments
Services Directive and Payments Services
@
Review of VAT Directive (initiative on VAT
@
EU Greening Transport Package and
proposed initiatives, CountEmissions EU
and CO
2
emission standards for heavy-
duty vehicles
@
Engagement with anti-monopoly bodies in
@
Engagement with custom offices in terms
of fuel distribution and VAT refunds
Considerations and outcomes in 2023
@
Vega case matters via trade associations
@
Participation in Experts Group for Vega
case matter appointed by the Directorate
General for Taxation and Customs Union
@
Position paper on CountEmissions EU
@
DG TAXUD’s guidelines on implementation
of Vega case
@
Industry position paper on clean mobility in
the CRT sector in the Czech Republic
Strategic Report Corporate Governance Financial Statements32
EUROWAG Annual Report and Accounts 2023
Chief Financial Officer review
Financial review
Sustained strong growth from our business
critical products and services
@
FY 2023 performance in-line with expectations
@
Total net revenue
@
Payment solutions
customers and growth from toll revenues
@
driven by effective cross selling
@
Adjusted EBITDA
and adjusted EBITDA margin
@
Adjusted profit before tax
relating to amortisation from acquired intangibles, finance costs and a non-cash goodwill
Completed intense investment phase; M&A
and building the industry’s first digital app
@
Completed significant acquisition of Inelo, enhancing the Group’s scale and product
at 2.9x net
debt to adjusted EBITDA
@
@
Development of industry-first digital platform on track, soft launch still expected in Q4 2024
Outlook
@
Despite macroeconomic challenges, the Group remains confident in the medium-term value
creation delivered from the platform and acquisition synergies; guidance remains unchanged
Oskar Zahn
Chief Financial Officer
Strategic Report Corporate Governance Financial Statements 33
EUROWAG Annual Report and Accounts 2023
Key statutory financials FY 2023 FY 2022
YoY change
2,088.1
(39.3)
(6.62) 2.41
Alternative performance measures
1
FY 2023 FY 2022
YoY change
FY 2023
organic
Organic YoY
256.5 190.9 34.4% 14.5%
Payment solutions revenue
147.0 9.0% 146.7
109.5 56.0 95.6%
108.7 33.2% 91.5 12.2%
42.4% 41.9%
Adjusted basic EPS
6.49 5.75 5.25
FY 2023 FY 2022
YoY growth
Average active payment solutions customers 18,379 16,950
Average active payment solutions trucks 93,882 6.5%
Payment solutions transactions 37.4m 35.2m 6.3%
Notes:
basic EPS are non-statutory measures which provide readers of this announcement with a balanced and comparable view of the
Group’s performance by excluding the impact of adjusting items, as disclosed in the section Alternative performance measures
below and Note 11 of the accompanying Financial statements.
2. Organic growth for the year represents Group growth, excluding Inelo and related synergies and integration expenses.
3. Net leverage covenant calculation as per bank definition using adjusted EBITDA for the last twelve months. Net debt
includes lease liabilities and derivative liabilities.
Financial review
Eurowag delivered a robust performance last year, despite the challenging macroeconomic
pressures, demonstrating once again the inherent resilience of our business model and the
mission critical nature of our services.
million and other adjusting items.
Performance review
Below is a summary of the segmental performance and explanatory notes relating to corporate
expenses, adjustments, 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
calculated by removing such adjustments from our statutory results. Note 11 to the consolidated
Financial statements includes reconciliations.
Strategic Report Corporate Governance Financial Statements34
EUROWAG Annual Report and Accounts 2023
Segments
FY 2023
(€m)
FY 2022
YoY
YoY change
Gross revenue 2,088.1
Payment solutions 1,978.6 2,312.3
109.5 56.0 53.5 95.6%
Net revenue 256.5 190.9 65.6 34.4%
Payment solutions 147.0 12.2 9.0%
109.5 56.0 53.5 95.6%
Expenses included in Contribution (55.9) 75.4%
Contribution total
1
200.6 159.0 41.6 26.2%
Payment solutions 124.1 5.9 5.1%
76.5 35.7
Contribution margin total
1
78%
Payment solutions 84%
70% 73%
Note:
1. Please refer to the section Alternative performance measures below for a definition and Note 11 of the accompanying
Financial statements.
average energy prices of around 13.5% (a corresponding decrease was reported for costs of
synergies. Excluding acquisitions, organic net revenues grew 14.5%, driven by strong growth in
mobility solutions and almost double-digit growth in payment solutions revenues. If we had
the year.
expanding our automotive partnerships and Webeye full-year consolidation.
higher net revenues, although increased expenses reduced the contribution margin performance
In terms of geographic breakdown, the Central cluster remains the largest segment with around
The majority of the countries in the Central cluster delivered strong double-digit growth. The
Southern cluster has kept the momentum from 2022 and remains the fastest growing area with
basis, the Southern cluster delivered 29.7% growth year-on-year. A 2.7% decline in the Western
Corporate expenses
been treated as an adjusting item, with further details provided later on in this Financial review.
Adjusted
(€m)
Adjusting
items
(€m)
FY 2023
(€m)
Adjusted
Adjusting
items
FY 2022
Employee expenses 85.1 11.7 96.8 7.4 67.2
Impairment losses of financial assets 8.9 — 8.9 3.9 0.0 3.9
Impairment losses of non-financial assets 0.0 56.7 56.7 0.0 0.0 0.0
Technology expenses 13.9 5.0 18.9 9.5 0.3
Other operating expenses 50.0 5.5 55.5 36.4 47.2
Other operating income (10.1) — (10.1) 0.0
Total operating expenses 147.8 78.9 226.7 109.2 127.7
Depreciation and amortisation 40.4 17.1 5 7. 5 22.0 30.4
Total 188.2 96.0 284.2 131.2 26.9
comprised mainly of the following:
was mostly due to inflationary pay rises, Webeye remuneration and senior hires.
majority of the increase relating to credit losses from more customers going into bankruptcy,
mainly in Poland, Portugal, Hungary and Romania. The full year credit loss ratio increased slightly
The Group continues to apply rigorous credit loss controls to manage this risk and, as a result,
approximately 74% of its receivables portfolio balance was current as of the end of December
2023.
Financial review continued
Strategic Report Corporate Governance Financial Statements 35
EUROWAG Annual Report and Accounts 2023
year increase.
expenses include costs such as travel, market research, professional services such as
consultancy, legal and accounting services, etc.
risk management.
Inelo acquisition.
Adjusting items
considered to be adjusting items and have therefore been excluded when calculating adjusted
EBITDA and adjusted profit before tax. These are summarised below:
FY 2023
(€m)
FY 2022
4.4
Strategic transformation expenses 7.1 5.2
Share-based compensation 6.5 5.3
Impairment losses of non-financial assets 56.7 —
Restructuring costs 4.2 —
Adjusting items in operating expenses 78.9
Adjusting items in depreciation and amortisation 17.1
Total adjusting items 96.0 26.9
Strategic transformation expenses are costs relating to transformation of key IT systems and the
two years. This new financial system is a core technology for our new integrated platform and
Share-based compensation primarily relates to adjustments for the compensation provided to
the Group’s previous management prior to the IPO. These legacy incentives comprise a
combination of cash and share-based payments, and those that have not yet vested will vest
were one-off awards, designed and implemented whilst the Group was under private ownership.
For clarity, post-IPO share-based payment charges are not treated as adjusting items.
Impairment losses of non-financial assets is the charge recognised for the impairment of
goodwill. This non-cash charge is an accounting assessment primarily related to the fleet
conditions, delayed integration and lower revenue growth rates, the Group has reduced future
cashflows when undertaking this accounting assessment. As a result of these updated
related mainly to our ADS acquisition in 2019.
Following the acquisition of Inelo, the Group began and completed a major restructuring
integrating people from new acquisitions.
significant increase is due to the acquisition of Inelo.
Net finance expense
following the Inelo acquisition, and partly due to higher factoring fees related to higher average
factoring utilisation throughout the year. Interest expense was partially offset by finance income of
Czech Koruna in 2022 to Euros in 2023.
Taxation
adjusting items.
functional currency change during 2023. The ongoing adjusted ETR is expected to increase
closer to the statutory rate.
Strategic Report Corporate Governance Financial Statements36
EUROWAG Annual Report and Accounts 2023
Earnings per share (“EPS”)
This decrease was predominantly due the Group reporting a loss for the full year 2023 related to a
non-cash goodwill impairment, higher finance costs and amortisation from acquired intangibles.
2022. The weighted average number of ordinary shares in issue during 2023 amounted to
Plan, adjusted diluted earnings per share was 6.46 cents per share.
Acquisitions and investments in subsidiaries and associates
The Group completed a new acquisition in 2023, with further investment in previous acquisitions
which together support the Group’s strategy to create a platform of multiple products. The new
acquisition was a 100% interest in Inelo.
to other purchase price adjustments identified at completion.
In December 2023, the Group entered into an agreement to acquire the remaining 49% equity
remaining shares were transferred as of 1 January 2024, with the consideration to be determined
based on the FY 2023 results and paid in the second half of 2024. The agreement will enable the
Group to accelerate the full integration of KomTeS.
In December 2023, the Group sold its 51% equity interest in Tripomatic. Tripomatic was a
non-core investment of Sygic, with its business based on consumer travel planning application.
Cash performance
FY 2023
(€m)
FY 2022
YoY
YoY change
Net cash generated from operating activities 30.9 44.2
Net cash used in investing activities (333.7) 220.0%
Net cash used in financing activities 24 7.1 265.3
Net decrease in cash and cash equivalents (55.7) 22.5
Cash and cash equivalents at beginning of period 146.0 224.2
Cash and cash equivalents at end of period 90.3 146.0
Interest-bearing loans and borrowings (407.1)
(316.8)
The decrease in the level of cash is due to the cash outflows used in investing activities, including
the acquisition of Inelo and technology transformation investments.
primarily due to working capital movements and higher interest payments. Working capital as at
due to different payment timings as of the end of 2022 and changes to payment terms in Spain,
where we saw competitive pricing from smaller fuel suppliers with shorter payment terms. The
Inelo acquisition as well as higher interest rates relating to our Euribor exposure from factoring of
receivables.
the outflows in connection with investment in acquisitions and capital expenditure.
Capital expenditure
previous year. This increase is primarily a result of the inclusion of Inelo into the Group.
investment into existing products, technology and infrastructure as well as hardware which
represents OBUs. Ordinary capital expenditure grew year-on-year as a percent of net revenues
from 9% to 11%, as a result of a higher capital investment ratio at Webeye and Inelo, which invest
a larger proportion of their capital into OBUs.
Transformational capital expenditure is now largely complete and in-line with previous guidance
initiated at the end of 2021 and focused on building and implementing modern technology,
preparing the Group for the platform launch in 2024 by enhancing sales and customer touchpoint
channels; expanding product capabilities, particularly the development of our EETS technology
and EVA OBU; and building a cloud-based data system to capture customers’ data on one
platform, enabling the Group to draw on AI and digital insight tools.
Financial review continued
Strategic Report Corporate Governance Financial Statements 37
EUROWAG Annual Report and Accounts 2023
Capital allocation
The priority remains to drive long-term sustainable growth via both organic and inorganic
investment. The Group will continue to focus on integrating the businesses acquired in 2022 and
2023, aligning products and people capabilities across the organisation and unlocking both
revenue and cost synergies. With the recent acquisition of Inelo, our debt leverage ratio has, as
guided, moved to 2.9x net debt to adjusted EBITDA, which is above our medium-term guidance
range of 1.5x to 2.5x. Therefore, our priority in the near term is to return to within the target
current and adjacent markets, and in product and technologies that will accelerate growth. The
Group is underpinned by a robust balance sheet and, therefore at this stage, the Group does not
intend to pay dividends; instead, it intends to prioritise investment in growth.
Financing facilities and net debt
covenants at the Group level. The financial covenants are tested semi-annually, based on
announced reported financials.
Following the acquisition of Inelo, the leverage ratio moved to 2.9x net debt to adjusted EBITDA,
which is above the Group’s medium-term guidance range of 1.5x to 2.5x. Therefore, our near-
term priority is to return to within the target range.
Covenant Calculation Target
Actual
31 December
2023
Interest cover the ratio of adjusted EBITDA to finance charges 4.82
Net leverage the ratio of total net debt to adjusted EBITDA 2.90
Adjusted net leverage
the ratio of the adjusted total net debt to
adjusted EBITDA 4.22
The Club Finance facilities which mature in September 2027 comprise the following:
@
@
@
@
loans
Incremental Facility to finance capex and acquisition related payments. Further details are
outlined in Note 30.
The Group has effectively managed its floating EURIBOR interest rate exposure on existing term
loans through the execution of zero floor interest rate swaps. The swaps were structured with
varying hedge ratios, providing Facility A and Facility B coverage of 100% in 2023 and 2024, 75%
in 2025, 50% in 2026, and 25% in 2027. The Incremental Facilities have not been hedged.
have an effective payable fixed rate of 0.1% and expire in 2024. Additional interest rate swaps
and expire in 2027. The latter have a complementary amortising profile in order to achieve the
above-mentioned hedge ratio. With respect to Facility B, interest rate swaps executed in 2023
and 3.5% and expire by 2027.
Throughout 2023, the Group has effectively managed its working capital needs through the use
Group’s proactive approach to maintaining a strong financial position, and its ability to optimise
working capital.
Subsequent events
Pay-out of deferred consideration
the acquisition of Webeye.
Acquisition of 4.19% interest in CVS Mobile d.d.
On 7 February 2024, the Group acquired the remaining 4.19% interest in CVS mobile d.d. through
Amendment to the Club Financing agreement
relation to the uncommitted Incremental Facility, increasing the amount that can be used for
amendment was also agreed to remove the requirement to calculate the interest cover covenant
as at 30 June 2024.
JITpay GmbH insolvency
administrator of JITpay GmbH, a holding company of JITpay group. The Group continues
discussions with the other stakeholders to determine the impact on our investment, which had a
Strategic Report Corporate Governance Financial Statements38
EUROWAG Annual Report and Accounts 2023
Alternative performance measures (“APMs”)
the readers of the consolidated Financial statements and enhance the understanding of the
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)
FY 2023
(€m)
Adjusted
Adjusting
items
FY 2022
Net revenue 256.5 — 256.5 190.9 — 190.9
EBITDA 108.7 78.9 29.8 63.1
42.4% — — — —
Depreciation, amortisation and impairments (40.4) 17.1 (57.5)
68.3 96.0 (27.7) 59.6 26.9 32.7
Finance income 14.7 — 14.7 —
Finance costs and share of net loss of
associates (26.3) — (26.3) —
56.7 96.0 (39.3) 54.9 26.9
Income tax (10.0) (5.8) (4.2)
Loss from discontinued operations — 0.5 (0.5) — — —
46.7 90.7 (44.0) 41.6 23.9 17.7
6.49 (6.62) 5.75 2.41
accompanying Financial statements.
Outlook, near and medium-term guidance remains unchanged
Eurowag enters 2024 in a strong position, despite the macroeconomic environment impacting
expected to continue into 2024, impacting loads and therefore resulting in less kilometres driven.
Following its strategy, the Group is coming out of a heavy investment phase in both technology
and acquisitions to create an industry-first integrated platform driving growth by offering new
digital solutions to many of the CRT industry’s biggest challenges. Eurowag’s investment in
recent years has delivered a mission-critical product suite to its customers, which underpins the
Group’s confidence in delivering mid-teens organic net revenue growth in the near and medium-
term. With further integration work still to take place in respect of recent acquisitions, adjusted
EBITDA margins in FY 2024 are expected to remain in-line with FY 2023 at around 43%, and
grow over the medium-term.
Whilst the absolute amount of capital expenditure reduces this year and the transformational
result, the net debt to adjusted EBITDA ratio, at the end of FY 2024, is expected to be moderately
The launch of the much-anticipated digital platform in Q4 remains on track, with expectations to
unlock further opportunities whilst driving value for Eurowag’s customers and shareholders. The
Group is confident this offering, an industry first, will drive further cross selling and value for all
stakeholders. As a result, the Group is confident it will deliver strong growth in-line with
expectations, and medium-term financial guidance remains unchanged.
Oskar Zahn
Chief Financial Officer
Financial review continued
Strategic Report Corporate Governance Financial Statements 39
EUROWAG Annual Report and Accounts 2023
Identifying and managing our risks
Risk management
Risk identification, assessment and management are central within our
internal control environment, and risk management is recognised as an
integral element in ensuring that we undertake informed decision
making and have optimal efficiency in our operating activities.
Overview
Risk management is an ongoing process. As with all businesses, our risks evolve constantly, along
with the environment in which we operate. To pursue our strategic objectives, we have established
a risk management framework that enables us to identify, evaluate, address, monitor and report
effectively the risks we face and helps us achieve a balance between risks and opportunities.
Risk management framework
Our risk management framework is designed on the accepted system of three lines of defence
internal control, and related financial and business reporting. Within the three lines of defence,
the first line manages and “owns” the risk; the second defines a uniform management framework
for each risk category; and the third provides independent confirmation of the effectiveness of
the risk management process. The Group’s Internal Audit function is partially outsourced to
The Board has overall responsibility for managing risks. This includes identifying and monitoring
the principal risks that might prevent the Group from achieving its strategic objectives and
determining the extent and severity of risks we are willing to undertake – our risk appetite. The
Audit and Risk Committee acts on behalf of the Board and is responsible for supervising the
design of the risk management framework and its activities. In addition, we have established a
Business Assurance Committee comprised of members of the second line of defence,
representatives of the business, and selected members of the Executive Committee. This
Committee is responsible for more hands-on, systematic risk management activities, including
reviewing governance, approving risk assessments, monitoring risk exposure and managing
incidents. It escalates matters of importance to the Board’s Audit and Risk Committee.
Three lines of defence
Risk appetite
The goal of risk management is to ensure that the Group is exposed only to certain types and
severity of risk. This is defined as risk appetite. Risk appetite determines those risks that the
Group is willing to take and how to reduce and avoid risk in pursuing our strategic and
operational objectives.
Audit and Risk Committee
1st line of
Defence
2nd line of
Defence
3rd line of
Defence
Operations
Management
Internal Controls
Control Functions Internal Audit External Audit
Risk ownership Risk control Risk assurance
Strategic Report Corporate Governance Financial Statements40
EUROWAG Annual Report and Accounts 2023
The Group recognises the following categories of risk appetite:
Low appetite – we are not willing to be exposed to the respective risks and thus all the risks
need to be mitigated to the highest possible extent. This appetite corresponds to low risk rating.
Medium appetite – we are willing to be exposed to some of the risks falling into the category,
to a limited extent. The full mitigation of these risks needs to be considered in the cost and
business perspectives. This appetite corresponds to medium risk rating.
High appetite – we are willing to be exposed to the respective risks. The risks are monitored,
however, and their mitigation is done opportunistically. This appetite corresponds to high risk rating.
The Board has ultimate responsibility for defining risk appetite, but the initial proposal comes from
the Executive Committee. The Board ultimately reviews and approves this risk appetite and
evaluates whether the mitigation measures assigned to principal risks are adequate. The Board also
reviews whether the internal controls are adequate and effective. Risk appetite reviews take place
at least annually, taking into account changes in our business environment, economic situation,
geopolitical situation, internal initiatives, and developments in our exposure to principal risks.
Emerging risks
The Group continues to monitor and assess emerging risks (emerging risks are those which may
and top-down discussions held across the businesses and with select subject matter experts
with an aim to identify new principal risks and changes in the existing ones. The ongoing Russian
in the EEA countries are deemed significant emerging risks. In particular, we keep under review
the potential impact of these emerging risks to fossil fuel prices and the consequential impact
within our business operations.
Principal risks
The principal risks are the Group-wide key risks that pose the highest threat to our business and
strategic objectives. They are proposed by the Executive Committee and selected subject
matter experts, with the Board ultimately responsible for defining and approving them. The
process is as follows:
1. Identify the Group’s key principal risks
2. Identify the current mitigation measures
3. Evaluate the identified risks – estimating their impacts and probability of happening
4. Determine the current trends in risk evaluation criteria
5. Identify forward-looking measures
The Audit and Risk Committee discusses and reviews the principal risks quarterly.
Principal risks heat map
The heat map below shows the outcome of the processes for the principal risks assessment.
This shows the relative likelihood and impact of the principal risks identified. Risks rated as
high and critical are devoted a significant focus on their further mitigation and monitoring.
1 Product demand decline risk
2 Fuel supplies risk
3 EETS SLA compliance risk
4 External parties’ dependency risk
5 Technology security and resilience risk
6 Personnel dependency risk
7 Climate change risk
8 Physical security risk
9 Regulatory and licensing risk
10 Clients’ default risk
11 Processes execution risk
12 Liquidity risk
IMPACT
LIKELIHOOD
CatastrophicInsignificant
Almost certainRare
5
1
3
11
10
12
9
7
4
2
6
8
Risk management continued
Increased Decreased No change New risk
Strategic Report Corporate Governance Financial Statements 41
EUROWAG Annual Report and Accounts 2023
Principal risks register
The list below provides further details on our identified principal risks,
trends of their exposure and the mitigation measures implemented.
1. Product demand decline risk
Our operating results are dependent on the
conditions in the European economy and its
cycles. The volume of customer payment
transactions and customer demand for the
products and services provided by the Group
correlate with current and prospective
economic conditions across Europe. Economic
downturns are generally characterised by
reduced commercial activity and trade,
resulting in reduced demand and use of our
products and services by customers.
The economy continues to see indications of
recession, persistent weaknesses in supply
chains, which are now exacerbated by the
shipping crisis in the Red Sea, continued high
inflation, high nominal interest rates, volatile
currencies and reduced customer demand.
Eventual decline in demand would adversely
affect the Group’s current and prospective
business and financial condition.
Risk trend
@
Risk rating is at the level of the Group’s
approved risk appetite
Link to strategic priorities
Mitigation measures
@
Reducing dependency on a single economy
@
Reducing dependency on non-EUR
currencies or hedging
@
Diversification of products and services
implementation of subscription-based
revenues
@
countries
@
Strategy positioning flexibility – thanks to
wider portfolio of products, capability to adjust
the offer for customers to meet their needs
2. Fuel supplies risk
The Group recognises a risk of insufficient fuel
at its energy payments network, payments
reducing across its network and increased
consequence of imposed sanctions due to the
Russian invasion of Ukraine and potential
which are causing delays in cargo vessels and
an increase in crude oil prices.
The sixth sanctions package, imposed by the
European Commission, has introduced
prohibitions related to crude oil and petroleum
products, mainly in terms of their purchase,
import and transfer. Due to this package, the
Group is exposed to the risk of balancing
product disruption in Central Europe caused by
the ban on the export of products produced
from crude oil originating in Russia and
delivered via the Druzba pipeline. Disrupted
lead to a lack of products in certain markets
during certain periods. The situation could be
aggravated by local government intervention
unpredictable price development, potential
sabotage of the crude pipelines from Russia
and disruption of oil refinery production, with
the Group experiencing higher risks in securing
sufficient fuel supplies at its energy payments
network, at favourable financial and operational
terms. These risks could have an adverse
impact on the Group’s financial position,
operations and business.
Risk trend
@
current impact (delays in crude oil supplies,
as supply vessels are diverted to avoid the
Red Sea conflict zone, and the increased
@
The potential escalation of the conflict,
which can exacerbate the impact
@
The current managed risk rating is above the
Group’s approved risk appetite
Link to strategic priorities
Mitigation measures
@
Centralised procurement team for energy
supplies and logistics
@
Continuous monitoring and reporting on the
situation development of fuel supplies crisis
@
Scenario analysis of potential future
development and preparation of preventive
and mitigation actions in case of different
scenario materialisation
@
Diversification of different types of energies
@
Fuel procurement strategy is fully compliant
with EU legislations and sanctions: in 2023 we
have been focusing on local fuel procurement
versus cross-border deliveries. We are
confident that we can continue to provide
high-quality, EU origin and competitive
diesel, LNG and AdBlue to our customers
Increasing DecreasingStable
Attract Engage Retain
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3. EETS SLA compliance risk
The Group is a licensed EETS provider with a
completed certification in a number of
Belgium, Hungary, Austria, Poland, Sweden,
Denmark and the Czech Republic. Each
domain has its own strict service-level
Examples of the most critical SLAs are:
@
every two hours
@
@
– incident fix time for critical incident – four
hours; after that a contractual penalty
every hour
Compliance with the SLAs is monitored and
evaluated on a monthly basis. If Eurowag is not
able to meet the SLAs, we will be penalised
with contractually agreed financial penalties
and, in the worst case, our EETS domain
certification could be withdrawn. Over the last
few months, Eurowag has experienced a
number of operational incidents that have
resulted in non-compliance with the EETS
Charger SLAs and consequent penalties. The
risk increases with each new domain released.
Risk trend
@
Due to the upcoming release of SK EETS
with the strictest SLAs and highest
financial penalties
@
The Group has in place a plan of mitigating
the risk
@
The current managed risk rating is above the
Group’s approved risk appetite
Link to strategic priorities
Mitigation measures
@
support provided by Webeye and
external partner
@
Performance monitoring is in place and
connected to Webeye’s ticketing system.
In case of disruption, an incident process
is triggered
@
Automated regular monitoring of adherence
to contractually set SLAs is in place
@
Incidents management process in place
@
Continuous creation of recovery procedures,
in case of component failure
4. External parties’ dependency risk
The Group’s business is dependent on several
key strategic relationships with third parties,
the loss of which could adversely affect our
results. Key partners mainly fall into the
following categories – fuel suppliers,
acceptance network, toll chargers, and
technology service providers. Failure or
termination of relationships with key external
partners could have a negative financial,
business and operational impact.
Risk trend
@
The current managed risk rating is at the
level of the Group’s approved risk appetite
Link to strategic priorities
Mitigation measures
@
IT vendors management policy – setting the
standards for vendor selection, contract
reviews and signature and vendor
monitoring
@
Centralised vendor management
@
Centralised procurement team for energy
supplies and logistics
@
Centralised development and maintenance
for acceptance network
@
Contract management rules and attestation
rules
@
Centralised legal counsel – aids contract
elaboration and reviews
@
New IT system on orders and invoice
management
@
Continuous implementation of
improvements, which are a result of human
rights risk assessment – human rights
training, Code of Conduct for suppliers,
and supplier onboarding process
Increasing DecreasingStable
Risk management continued
Attract Engage Retain
Strategic Report Corporate Governance Financial Statements 43
EUROWAG Annual Report and Accounts 2023
5. Technology security and resilience risk
The Group’s business relies on technology and
data confidentiality, integrity and availability.
As with other businesses, we are subject to
the risk of external security and privacy
breaches, such as cyber attacks. These
attacks are continuously increasing in number
and sophistication, particularly those coming
from Russia. If we cannot adequately protect
our information systems, including the data we
collect on customers, it could result in a
liability and damage to our reputation.
activities and, where a newly acquired
company does not have IT security standards
at the same level as the Group, the enlarged
Group could expose itself to an increased risk.
Also, if the technology we use to operate the
business and interact with customers fails,
does not operate to expectations or is not
available, then this could adversely affect our
business and results.
Risk trend
@
Due to the continuously increasing number
and sophistication of cyber threats
@
The current managed risk rating is above the
Group’s approved risk appetite
Link to strategic priorities
Mitigation measures
@
The Group protects itself against cyber
attacks by continuous implementation
and improvement of the cyber security
standards, with an endeavour to follow
ISO 27001
@
The Group has established a three lines of
defence with clear responsibilities regarding
cyber security
@
The existing IT security level of newly
acquired companies is considered before
their systems are integrated with Group
systems
@
The Group continuously audits its
cyber security
6. Personnel
dependency risk
The Group’s success depends, in part, on its
Executive Committee members and other key
personnel, and its ability to secure the
capabilities to achieve its strategic objectives.
Lack of capability and the loss of key
personnel could adversely affect our business.
and competition in the job market are
increasing the risk of retaining key personnel
and acquiring new talents.
Risk trend
@
The current managed risk rating is at the
level of the Group’s approved risk appetite
Link to strategic priorities
Mitigation measures
@
Establishing and nurturing a talent pool to
maintain the required skills level within
the Group
@
Annual salary review process in place to
reflect inflation, market salary levels and
performance ratings
@
Long-term retention plans for the talent pool
@
Succession plans providing adequate
training for chosen successors
@
Group commitment to greater DEI
@
Key personnel rotation for selected functions
Increasing DecreasingStable
Attract Engage Retain
Strategic Report Corporate Governance Financial Statements44
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Increasing DecreasingStable
8. Physical security risk
The Group operates a number of truck parks
and offices, and these are exposed to security
threats. A security threat materialising as a
result of insufficient protection or natural
disasters would result in danger to the health of
our employees and customers, and significant
business disruptions. This risk is increased with
the Russian invasion of Ukraine and potential
escalation of the conflict to other countries,
including those where the Group has its
employees and assets.
Risk trend
@
Due to the continuous Russian invasion of
Ukraine and its potential further development
@
The current managed risk rating is above the
Group’s approved risk appetite
Link to strategic priorities
Mitigation measures
@
Implementation of the health and safety
plans on the Group’s truck parks to avoid
security threats
@
Having in place robust emergency plans
@
Petrol stations security protocols and
system for prevention against physical
security threats
@
Business continuity plans
7. Climate change risk
Climate change and the transition to a net zero
future represents both a risk and an opportunity
for the Group. Our reputation, resilience,
operating and compliance costs, and
diversification of revenue will all be influenced
by our pace of action, the pace of the energy
transition in the CRT sector, and our
stakeholders including customers, investors
and regulators – across the short, medium
and long-term. Our business generates a
significant proportion of revenue from fees
for selling energy to the CRT sector, currently
predominantly diesel fuel, so as the CRT industry
moves away from fossil energies, there is a risk
of stranded assets. We are aware that changes
in road transport policy and regulations, the
cost of carbon, carbon taxation, changes in
market demand for alternative fuel and clean
mobility solutions, and the pace of adoption of
by our customers will all influence the level of
risk and opportunity for the business. We face
transitional risk from the potentially higher
investment needs coming from new policies,
laws and other regulations designed to address
climate change, and changes in technologies
and customer expectations. Liability risks could
then arise from a failure to mitigate, adapt to,
disclose or comply with changing regulatory
expectations. We also recognise that climate-
related extreme weather events could pose a
physical risk to business continuity for some of
our physical assets, as well as the health, safety
and wellbeing of our workforce and customers.
The Group already recognises the impact of
weather changes on delays and the decrease
in transactions linked to seasonal transport in
some regions. Furthermore, we recognise that
we are responsible for reducing our own carbon
footprint, as well as developing solutions to help
customers reduce their footprints and make the
transition to a low-carbon future, accelerating
the transformation of the CRT industry.
Risk trend
@
Due to scientific predictions and upcoming
actions of regulators, countries and
community leaders
@
The Group has a strategy in place to mitigate
the risk to the risk appetite level
@
The current managed risk rating is above
the Group’s approved risk appetite
Link to strategic priorities
Mitigation measures
@
Investment and business development in a
portfolio of alternative fuels and technologies
– including electrification (investment in Last
Decarbonisation as a Service – to accelerate
the transition to a low-carbon future in the
CRT sector, avoid stranded assets in our
own portfolio mix and increase the
proportion of revenue Eurowag generates
from EU Taxonomy-classified activities
@
Investment in digitalisation and
technologies, including route optimisation,
driver behaviour, loads optimisation,
high-capacity vehicles and increased
telematics installations, to help our
customers improve efficiency and reduce
energy intensity per kilometre
@
Formalisation of the Group’s sustainability
strategy and net zero plan, including carbon
reduction targets for our operations; the
development of targets and actions to
reduce Scope 3 emissions across our value
chain; and a clear transition plan away from
fossil energies towards being a net zero
business by 2050
@
Commitment to reduce GHG emissions from
our own operations and become a zero
emissions operation by 2040
@
help with developing lower carbon-intensive
vehicles, with greater tracking and
monitoring of environmental impacts, and
lower life cycle emissions
@
Inclusion of the adaptation to the potential
impacts of extreme weather events, driven
by climate change, and the impact on both
people and physical assets, into our
business continuity plans and asset
management planning
@
Increased transparent reporting of carbon
emissions and related actions to reduce
emissions, aligned with the Corporate
@
Inclusion of financial risk stemming from
climate change in our financial modelling
and financing approaches, including formal,
structured scenario analysis to assess the
physical, transitional and liability risks for
Eurowag and its assets, using the outputs to
inform ongoing risk assessment and
mitigation measures, as well as reporting
in-line with TCFD
Risk management continued
Attract Engage Retain
Strategic Report Corporate Governance Financial Statements 45
EUROWAG Annual Report and Accounts 2023
9. Regulatory and licensing risk
The Group relies on numerous licences for the
provision of its on-road mobility products.
These include wholesale and retail permits
required for the provision of fuel products, as
well as fuel station operating licences for its
truck parks, EETS licence and EETS
certifications in a number of countries,
electronic money institution licences required
for the provision of financial services, and an
insurance distribution licence. As a
consequence of holding these licences and
certifications, the Group is subject to strict
regulatory requirements (governance,
regulatory bodies in respective jurisdictions.
Non-compliance with these can result in fines,
suspension of business or loss of licences. Key
regulatory requirements are undertaken by
governance and compliance with UK listing
sanction laws, personal data protection laws,
Czech National Bank regulation, fuel-reselling
legislation, and EETS regulation. In addition,
changes in laws, regulations and enforcement
activities are accompanied with the cost of
implementation and may well adversely affect
our products, services and markets.
Risk trend
@
Governance Code changes, new IT security
of the Group’s business activities within
highly regulated markets
@
The Group focuses on delivering the
technology roadmap and is focusing on
improvement of its internal controls’
effectiveness, to address the gap between
risk appetite and risk rating
Link to strategic priorities
Mitigation measures
@
Legal and compliance business partners
dedicated for all business units
@
Continuous improvement of the risk
management control framework, specifically
in terms of regulatory and licensing risks
mitigation
@
Involving legal and compliance reviews in
new market entry process
@
partner screening directive and detailed
@
use regulated financial services
@
@
Group-wide personal data protection policy
and detailed GDPR directive
10. Clients’ default risk
The Group faces credit risks associated with
our clientele, notably those within the small to
mid-sized CRT business sector. Our exposure
is particularly pronounced within our payment
solutions segment, where we extend financing
to customers based on deferred payments
for energy consumption and toll balances.
An inadequate assessment and monitoring of
the creditworthiness of these counterparties
could potentially lead to elevated credit
losses, impacting our financial health and
operational stability.
Risk trend
@
Due to continuous worsening of the
economic situation and potential further
impacts on fuel prices arising from the
@
The current managed risk rating is in-line
with the Group’s approved risk appetite
Link to strategic priorities
Mitigation measures
@
Initial credit evaluation: Upon customer
onboarding, the Group conducts a
comprehensive credit assessment. This
entails a thorough financial review of the
client’s recent performance and projected
growth, coupled with a business analysis.
Additionally, we corroborate our findings with
information sourced from reputable databases
@
Continuous credit monitoring: Our dedicated
credit risk department diligently oversees
credit exposures. This involves periodic
revisions of credit limits based on their
utilisation and the realignment of collaterals
as the situation necessitates
@
routinely reviews the ageing of receivables.
This process utilises expected loss
calculations that consider parameters such
as the probability of default, exposure at the
point of default, and potential loss ensuing
from default
@
Credit insurance: To safeguard against
potential customer defaults on trade and
other receivables, the Group has invested
in credit insurance. These insurances are
structured with first-loss policies, both on
individual and aggregate levels
@
Collateral measures: To secure our credit
exposure, the Group takes multiple
precautions. We obtain cash deposits and
advance payments from our clientele.
Furthermore, to bolster our risk mitigation
efforts, we also accept other security
measures including, but not limited to,
pledges on assets and promissory notes
@
Factoring facilities: In specific scenarios,
the Group may engage uncommitted
factoring facilities, thereby transferring
the associated credit risk to the respective
@
VAT refunds: The Group manages and
controls collection of some VAT refund clients
from local tax authorities; proceeds can be
used as means of reducing clients‘ exposures
Increasing DecreasingStable
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Strategic Report Corporate Governance Financial Statements46
EUROWAG Annual Report and Accounts 2023
11. Processes execution risk
The Group operates in a very complex and
diversified environment. The Group’s entities
are in different stages of processes, IT systems
and governance maturity. Lower maturity of
processes results in uncoordinated actions and
unintended mistakes, as a consequence of
manual controls. The outcomes of these mistakes
could materialise in breach of contractual
obligations towards third parties (e.g. change
management notification obligations towards
lower quality of service provided to our clients.
accompanied by an increase of the overall
complexity in the Group’s processes and
demands on systems, data and people. Where
there is an inadequate post-merger integration
process and insufficient predispositions for a
data management maturity and processes
exposes itself to additional processes risk
Risk trend
@
Due to the increased complexity brought by
recent acquisitions, which has increased the
demands on finance processes, in particular
@
The Group expects to mitigate this risk in the
coming periods through the integration of
our acquisitions and the implementation of a
new ERP system
Link to strategic priorities
Mitigation measures
@
The Group has established post-merger
integration processes with clear governance
and senior leadership
@
The Group engages well-established
consulting firms to assist in the post-merger
integration process, when needed
@
The Group has designed its processes
model, which is continuously maintained
a Processes Design department, which
focuses on improvement of the
processes’ maturity
@
The Group has established an internal
controls risk management framework.
Regular reporting and testing of the internal
controls ensure continuous improvement of
the effectiveness of operational controls
@
Operational model transformation introduces
new focus and disciplines in the product and
technology capabilities
12. Liquidity risk
Following the Group’s recent period of
significant investment in transformational
capital expenditure and acquisitions of
Webeye and Inelo, the overall net debt to
adjusted EBITDA ratio is above our medium-
term guidance of 1.5x to 2.5x. This has
impacted our ability to secure additional funds
on favourable terms, such as interest rates and
margins. Looking ahead to the upcoming year,
mainly two challenges threaten to intensify our
liquidity risk: firstly, the planned hike in toll
Group’s liquidity; and secondly, the continued
geopolitical crisis presents a threat of
increased fuel prices. Despite being
transferred to clients, this presents a risk of a
heightened commitment of liquidity, requiring
increased guarantees and prepayments.
The Group mostly faces a risk of accessing
additional liquidity at high costs, non-delivery
of its commitments due to insufficient working
capital and lastly, in case of liquidity issues,
operational constraints.
Risk trend
@
Due to the continuous worsening of the
economic situation
@
The Group has in place a plan to close
the gap between the risk exposure and
risk appetite
Link to strategic priorities
Mitigation measures
@
As of Q1 2024, the Group has restarted a
refinancing project which will result in
improved cash flow
@
Within this refinancing project, the Group
intends to modify the terms and
amortisation period of the current loans, to
decrease pressure on quarterly repayments
@
The Group has been looking into a project
involving business operations teams (sales
payment terms with customers and
suppliers. Successful alignment on these
targets should result in a positive effect on
the Group’s operating cash flow in 2024
Increasing DecreasingStable
Attract Engage Retain
Risk management continued
Strategic Report Corporate Governance Financial Statements 47
EUROWAG Annual Report and Accounts 2023
Viability statement
In accordance with provision 31 of the UK
the Board has assessed the Company and
Group’s prospects and viability, considering
the business model, the Group’s current
financial position, and principal risks over a
period longer than the 12 months required by
the Going concern statement.
Assessment of budget and
financial forecast
The Company’s and Group’s financial forecast
is assessed primarily through the financial
and the strategic planning (long-term strategic
Executive Officer, Chief Strategy Officer and
Chief Financial Officer, in co-operation with
divisional and functional management teams.
The Board participates fully in the annual
process to review, challenge and approve the
annual operating budget for the next financial
year. The Group also has a long-term strategy
in place in the form of a long-term strategic
plan. The strategy is reviewed and updated on
a periodic basis and is based on detailed
financial forecasts.
The latest annual operating budget for the
year ending 31 December 2024 was reviewed
and approved by the Board in December 2023,
and this budget is based on the Company and
Group’s current financial position, and its
prospects over the forthcoming year and
in-line with the Group’s stated strategy.
Viability statement and Going concern
Viability statement and Going concern
Viability timeframe
The Board has determined that a three-year
period to 31 December 2026 is the appropriate
timeframe to assess viability.
The choice of this timeframe is based on the
following rationale:
@
This period is reviewed by the Board in the
long-term planning and detailed annual
budgeting process and allows financial
modelling to be supported by the budget and
growth factors in the business plan approved
by the Board
@
This time horizon is captured as the relevant
period for evaluation and stress testing of
principal risks (primarily those of an
within this timeframe
@
The innovative nature of the Group and the
disruptive nature of the market make it
difficult to predict with sufficient confidence
how competition and other risks will impact
the business beyond a three-year timeframe
@
Considering the continuous changes of the
macroeconomic and political environment over
a period of longer than a three-year timeframe
would bring greater uncertainty to forecasting
assumptions
While the Board has no reason to believe that
the Company and Group will not be viable over a
longer period, they consider three financial
years to be an appropriate planning time horizon
to assess viability and to determine the
probability and impact of principal risks.
Assumptions used in financial
forecast
The main assumptions in budget and long-
term financial forecast are based on the
approach to build a strong foundation for
future sustainable growth, plan the correct
well as sufficient investment in working
capital, and maintain sufficient liquidity
headroom. Commercial objectives focus on
the shift from selling fossil energy to selling
solutions that improve our customers’
efficiency, introduce indirect and digital
channels to provide unique cross-sell
opportunities and reduce costs of acquisition
of new customers. Capital expenditure is
expected to continue at a higher percent of
net revenue than previously incurred, as the
acquired businesses, Inelo and Webeye, have
historically invested a higher percent of net
revenue than Eurowag, given their hardware or
transactions; only committed payments related
to past transactions.
Strategic Report Corporate Governance Financial Statements48
EUROWAG Annual Report and Accounts 2023
Assessment of viability
In 2023, the Board considered the application of the following risks:
Scenario 2: Downside Case Risk applied Assumptions Mitigants
Product demand
and decline risk
The application of product and demand risks presupposes a deteriorated GDP within the EU, leading to decreased
demand and subsequently, a reduction in the number of trucks. Additionally, an anticipated increase in bad debt is
applied, reflecting the assumption of financial instability among trucking companies. This is accompanied by an
The primary motivation for
implementing mitigating
actions is the advancement
of the EBITDA margin.
This includes HR costs,
which may involve
considerations such as
potential hiring freezes
and salary adjustments.
Additionally, there will
be a focus on reducing
consultancy expenses.
Furthermore, other
cost-saving measures
will be implemented to
counteract the decline
in net revenues.
Fuel supply risk The application of supply risks has a detrimental effect on our margin, which is anticipated to decrease due to
adverse market conditions.
Technology security
and resilience risk
Technology and security risks involve the potential occurrence of a cyber attack resulting in data loss. Based
on market knowledge and experience, this risk primarily impacts opex, mainly through additional expenses for
system repairs, process stabilisation and data analysis.
External parties’
dependency risk
implementation, resulting in increased consultancy costs.
Physical security risk Physical security risk pertains to the risk of flooding at the ADS fuel station in the Basque Country, particularly
during the spring season. This could lead to a temporary closure of the fuel station, resulting in decreased fuel
revenues and increased operational costs for IT and truck park maintenance and repair.
Climate change risk Climate change risk involves scenarios where the Company struggles to successfully implement its ESG strategy,
necessitating an accelerated implementation process for ESG projects. This would result in increased consultancy
and other associated costs.
Regulatory and
licensing risk
Regulatory and licensing risks encompass situations involving the loss of client data and GDPR issues,
which could result in fines impacting opex.
Climate change risk Climate change risks entail the failure to meet KPIs as defined in the amendment of our sustainability-linked loan
agreement, consequently affecting interest costs.
Processes execution risk Processes execution risk reflects a lower-than-planned synergy effect following the acquisition of Inelo,
leading to reduced expected revenues.
EETS SLA compliance
risk
EETS compliance risk assumes non-compliance with EETS rules, resulting in penalties that negatively impact
opex.
Scenario 3: Reverse Test Risk applied Assumptions Mitigants
Please see above Assumptions applied above with more severe impact.
as mentioned above with
sizeable impact
Viability statement and Going concern continued
Strategic Report Corporate Governance Financial Statements 49
EUROWAG Annual Report and Accounts 2023
The applied risks and their effect were
stress tested using a severe but plausible
downside scenario, as well as a reverse
stress test scenario.
The risks applied in the scenario with severe
but plausible effect on our budget and
long-term financial forecast considered the
impact of net revenues as follows:
@
2024 growth at a level of 9%
@
2025 was stressed to decrease by 3%
@
2026 remained flat year-on-year
The operating expenses level, combined with
the implementation of mitigating measures in
the downside scenario resulted in an EBITDA
margin matching the budgeted margin and the
EBITDA margin for 2025 and 2026 was slightly
below 40%. Change in net working capital was
stressed in the downside case through the
average, and levels of capital expenditure.
The scenario was also modelled to test potential
occurrence of any liquidity issues of the Group;
the tested scenario has proven that the Group
operates with a sufficient level of liquidity
headroom and has the ability to meet financial
covenants.The Board also considered potential
mitigating actions that the Group could take to
preserve liquidity and ensure compliance with
the Group’s financial covenants. These
mitigating actions include reduction of HR
costs, primarily resulting in potential hiring and
salary freeze, reduction of consultancy costs
and other costs which reflect the decline in net
revenues. For more information, please refer to
table above this text.
Along with this analysis, the Board considered
a reverse stress test scenario to further assess
the Company’s and the Group’s viability.
A reverse stress test scenario is a risk
management approach used to assess the
resilience of a company to a specific event
or risk. The reverse stress test assumes a
hypothetical worst-case scenario and works
backwards to identify the events that could
lead to a situation of potential breach of the
covenants. In order to assess the resilience of
the Company and the Group, the Board has
performed a reverse stress test to determine the
potential consequences of a liquidity crisis and
to approach the threshold of covenant breach.
The implementation of the reverse stress test
had the following effects on net revenues:
@
2024 growth at level of 9%
@
2025 is stressed to 10% decrease
@
2026 is stressed to 9% decrease
In addition to a reduction in net revenues, the
EBITDA margins would need to fall below 40%
in 2025 and 2026, together with changes in
net working capital driven by worsened DSO
by an average of 20 days.
The results of the test can inform strategic
decision-making, help identify areas where
additional risk mitigation measures may be
needed and provide stakeholders with greater
confidence in the Company’s ability to
navigate challenging market conditions.
The Board also considered potential mitigating
actions that the Group could take to preserve
liquidity and ensure compliance with the Group’s
financial covenants. In terms of mitigating
actions, the Board is confident that they would
be able to take similar actions to those taken
during previous economic downturns.
Considering the high severity of the reverse
stress test scenarios, the Board has no reason
to believe that the Company and Group will not
be viable over the long-term period.
Viability statement
Based on the above described assessment of
the principal risks facing the Company and
Group, stress testing and reverse stress
testing undertaken to assess the Company’s
and Group’s prospects, the Board has a
reasonable expectation that the Company and
Group will be able to continue in operation and
retain sufficient available cash to meet its
liabilities as they fall due over the period to
31 December 2026 and, consequently, the
Group is confident that it will remain relevant
and solvent in the medium to long-term, taking
into consideration the technological, social
and environmental changes expected to
happen in the medium to long-term period.
Going concern
The Financial statements have been prepared
on a going concern basis. Having considered
the ability of the Company and the Group to
operate within its existing facilities and meet
its debt covenants, the Directors have a
reasonable expectation that the Company and
the Group have adequate resources to
continue in operational existence for the
foreseeable future. The adoption of the going
concern basis is based on an expectation that
the Group will have adequate resources to
continue in operational existence for at least
twelve months from the signing of the
consolidated full year Financial statements.
The Directors considered the Group’s
business activities, together with the principal
risks and uncertainties, likely to affect its
future performance and position.
For the purpose of this going concern
assessment, the Directors have considered
the Group’s FY 2024 budget together with
extended forecasts for the period to
September 2025. The review also included the
financial position of the Group, its cash flows
and adherence to its banking covenants.
The Group has access to a Club Finance
facility which matures in September 2027,
comprising of the following:
@
facility with quarterly repayments plus
@
facility with quarterly repayments plus
@
@
for acquisitions, capital expenditure and
revolving loans
Strategic Report Corporate Governance Financial Statements50
EUROWAG Annual Report and Accounts 2023
The Group’s Club Finance facility requires
the Group to comply with the following
three financial covenants which are tested
semi-annually:
@
Net leverage: total net debt of no more
than 3.75 times adjusted EBITDA in 2024
and 3.5 times in 2025 and onwards
@
Interest cover: adjusted EBITDA is not less
than 4.0 times finance charges
@
Adjusted net leverage: adjusted net debt
times adjusted EBITDA
signed an amendment to its Club Finance
agreement removing the requirement to
calculate the interest cover covenant at 30
June 2024. Furthermore, the Group also
increased the amount that can be used for
under the uncommitted Incremental Facility.
The total amount of the uncommitted
Incremental Facility remains unchanged at
assessment as at 31 December 2023.
Throughout the period to September 2025, the
Group has available liquidity and on the basis
of current forecasts is expected to remain in
compliance with all banking covenants.
In arriving at the conclusion on going concern,
the Directors have given due consideration to
whether the funding and liquidity resources
above are sufficient to accommodate the
principal risks and uncertainties faced by the
Group. The Directors have reviewed the
financial forecasts across a range of scenarios
and prepared both a base case and severe but
plausible downside case. The severe downside
case assumes a deterioration in trading
performance relating to a decline in product
demand, as well as supply chain risks. These
downsides would be partly offset by the
application of mitigating actions to the extent
they are under management’s control,
including deferrals of capital and other
discretionary expenditure. The most extreme
downside scenario incorporating an
aggregation of all risks considered, showed a
year-on-year decline in net revenue by 4% and
an EBITDA margin of 41.5% in comparison to
the base case of net revenue growth of 15%
and a EBITDA margin of 42.4%. These adjusted
projections do not show a breach of covenants
in respect of available funding facilities or any
liquidity shortfall.
In all scenarios, the Group has sufficient
liquidity and adequate headroom in the club
finance facilities to meet its liabilities as they
fall due and the Group complies with the
financial covenants at 30 June and 31
December throughout the forecast period. The
Group has also carried out reverse stress tests
against the downside case to determine the
performance levels that would result in a
breach of covenants and the Directors do not
consider such a scenario to be plausible. The
Directors have also considered the impact of
climate-related matters on the Group’s going
concern assessment, and do not expect this to
have a significant impact on the going concern
assessment throughout the forecast period.
Since performing their assessment, there have
been no subsequent changes in facts and
circumstances relevant to the Directors’
assessment of going concern.
Viability statement and Going concern continued
Strategic Report Corporate Governance Financial Statements 51
EUROWAG Annual Report and Accounts 2023
Advancing our approach
Sustainability
I’m excited to have joined Eurowag to lead
the integration of sustainability into our
corporate strategy, building on the strong
foundation that comes from the close
alignment with our purpose to make the
CRT industry clean, fair and efficient. This
year we have strengthened our internal
capabilities and taken concrete steps
towards our annual milestones and long-
term environmental and social goals, despite
challenging macroeconomic headwinds.”
Jenny Pidgeon
VP Sustainability and CSR
We are committed to helping the CRT industry
become clean, fair and efficient.
2023 was the warmest year in recorded history
1
, and 2024
could be the first full year to go beyond 1.5°C of warming,
compared with pre-industrial levels. Enabling and accelerating
the transition to a low-carbon future, which will limit global
warming to 1.5°C in the long run, is paramount and it underpins
both our commercial and sustainability strategy.
Roughly 7% of the total GHG emissions in Europe come from the
CRT
2
industry. We aim to reach net zero emissions by 2050. To
achieve this, we have set a combination of short-term and
long-term decarbonisation targets and associated action plans,
both for our own operations and our value chain. Through our
digital platform, data insights and product and service offering, we
are in a unique position to help our customers improve efficiency
and reduce emissions. Our investment in alternative lower
carbon fuels, electrification and digital solutions for reducing
energy intensity helps our customers transition from fossil fuels
to alternative fuel solutions more easily. We have set ourselves
the target of having 80,000 active alternatively fuelled
commercial vehicles using our products and services by 2030
and we aim to help our customers to reduce their GHG emissions
intensity per tkm by 20% by 2030 from a 2019 baseline.
Another central focus within our sustainability approach is
promoting customer success and wellbeing. We help SME
transport companies thrive by offering benefits and services at
attractive terms so that they can compete, succeed and transition
– with our support – to a lower carbon digital future. We know
that truck drivers face significant challenges on the road,
ranging from concerns about their own physical safety to
loneliness. We are working to tackle these challenges by
improving the quality and security of facilities at our truck
parks, and introducing tech services to aid better driver
behaviour and safety.
The strength of our Group’s governance and culture underpins
all our activities. We strive to uphold the highest ethical and
responsible business and industry standards in our daily
operations, including promoting transparency and regulatory
compliance. Creating inclusive recruiting and employment
opportunities is core to building an outstanding culture. We aim
to achieve a top 25% employee engagement score,
benchmarked against European technology companies, by
2025. Our approach to sustainability governance and
accountability is set out in detail below, and more information
about the Company’s corporate governance structure and
reporting can be found on pages 84 to 92.
We are committed to making a positive social impact in our local
communities wherever we operate. In 2023, we donated 1.5% of
our EBIT to good causes. We actively encourage our employees
to give their time, skills and support to charitable organisations
through volunteering and employee-led philanthropy, and we
are developing a number of long-term partnerships with
non-profits in our key markets, designed to positively impact
outcomes aligned with our corporate purpose.
Whilst there is still much to do, our journey to supporting a
lower carbon, fairer, digital future is underway. Our
sustainability action plan, presented in this report, reflects our
commitment to and progress towards our long-term ambition.
Notes:
1. Source: https://climate.copernicus.eu/copernicus-2023-hottest-year-record.
3. We aim for 90% reduction Scope 1 and 2 by 2040 and 90% reduction for Scope 3
reduction in absolute emissions from our value chain and only c.10% offsets.
4. Tonne-kilometre, abbreviated as tkm, is a unit of measurement of freight
transport which represents the transport of one tonne of goods (including
packaging and tare weights of intermodal transport units) by a given transport
mode (road, rail, air, sea, inland waterways, pipeline, etc.) over a distance of one
kilometre.
7
Strategic Report Corporate Governance Financial Statements52
EUROWAG Annual Report and Accounts 2023
To activate our purpose and
deliver our corporate strategy,
we will embed sustainability
across all our business
activities, focusing on
four strategic areas.
We have set objectives and targets for
each focus area, and you can find out
more about them in the following pages,
and in our separate Sustainability Report,
available on our website.
Customer success and wellbeing
@ Help SME transport businesses to thrive
@ Improve wellbeing and safety for drivers
Y
Read more on page 59
Climate action
@
Accelerate the energy transition
@
Help customers reduce GHG emissions
@
Reduce our direct GHG emissions
Y
Read more on page 55
Community impact
@
Make a positive impact in our local communities
Y
Read more on page 61
Responsible business
@
Employee engagement and DEI
@
Responsible business practices
Y
Read more on page 62
Sustainability continued
Our sustainability strategy
P
e
o
p
l
e
S
u
s
t
a
i
n
a
b
i
l
i
t
y
Attract
Be in every truck
Engage
Drive customer centricity
Monetise
Grow core services
Retain
Expand platform
capability
Our purpose
To help make the
CRT industry clean,
fair and efficient
P
r
o
d
u
c
t
T
e
c
h
n
o
l
o
g
y
Eurowag
Sustainability
Action Plan
C
o
m
m
u
n
i
t
y
i
m
p
a
c
t
C
l
i
m
a
t
e
a
c
t
i
o
n
C
u
s
t
o
m
e
r
s
u
c
c
e
s
s
a
n
d
w
e
l
l
b
e
i
n
g
R
e
s
p
o
n
s
i
b
l
e
b
u
s
i
n
e
s
s
R
e
s
p
o
n
s
i
b
l
e
b
u
s
i
n
e
s
s
Strategic Report Corporate Governance Financial Statements 53
EUROWAG Annual Report and Accounts 2023
In 2021, we established a governance structure to agree and
monitor the implementation of our sustainability strategy. In
2023, we continued our focus on increasing Board
understanding and ownership of sustainability topics, including
climate risk and opportunity, on which we delivered specific
training for Board members.
The Board is ultimately responsible for sustainability, and
delegates accountability to the ESG Executive Committee. The
Committee is facilitated by the VP of Sustainability and CSR and
comprises: the Chief Executive Officer, Martin Vohánka; several
members of the Executive Committee, along with members
from the Senior Leadership Team, including representatives
from legal, human resources, communications, commercial and
investor relations; and one Independent Non-Executive
Director, Susan Hooper. Susan joined the Committee for the
first two years of its operations, to lend additional expertise and
experience whilst the Executive and leadership team built
internal understanding and established the building blocks for
successful development and implementation of the
sustainability action plan. Now that we are more mature in our
operations, from 2024 onwards the ESG Executive Committee
will run without Board representation.
The ESG Executive Committee sets the strategic direction and
tracks the progress of the sustainability action plan, related
policies and reporting, as well as monitoring relevant risks and
opportunities. It meets every quarter. We have introduced a formal
ESG policy that codifies and sets out our governance and approach
for integrating sustainability into our business, which is also used
for monitoring and reporting on progress. We will update this policy
in 2024 as part of our preparation for the CSRD. We have a
sustainability function to help ensure sustainability is embedded
into every part of our decision-making processes across the
Group, through close working with representatives across the
business who are responsible for the day-to-day delivery of the
sustainability strategy.
Governance and accountability
Sustainability governance framework
Board of Directors
@ Approves sustainability strategy and targets and monitors progress
@ Oversees climate-related risks and opportunities
@ Challenges Executives on integration of sustainability, time horizons used and stakeholder considerations
Executive Committee
@ Accountable for implementation and delivery of sustainability priorities
and targets
@ Approves sustainability reporting
ESG Executive Committee
@
Defines sustainability strategy
and targets, related policies,
and reporting
@
Tracks sustainability progress
@
Monitors ESG risks
and opportunities
Business Assurance Committee
@
Approves sustainability risk appetite changes
Internal Audit
@
Verifies sustainability
compliance and validity
of reported data
Remuneration Committee
@
Approves ESG reward and
performance management
Audit and Risk Committee
@
Monitors and reviews the Group-wide key
risks including ESG risks
@
Approves the Sustainability chapter
in the Annual Report and Accounts
Business units/Country operation/Functional leaders
@
Responsible for sustainability action plan implementation, integration into
business operations, and reporting on progress
Strategic Report Corporate Governance Financial Statements54
EUROWAG Annual Report and Accounts 2023
Sustainability continued
Action Plan progress
You can read more about our objectives and targets for each focus area in our separate Sustainability report, available on
our website.
Climate action
@
and 2, on a market-basis) by 11%
compared to baseline year 2019
@
Installed solar panels with 123 kWp
potential, almost doubling our on-site
renewable energy generation
capacity. In total, we are estimating to
save over 140 tCO
2
e annually
@
0.5% reduction in GHG emissions per
tkm across Eurowag’s customer fleet,
compared to baseline year 2019
@
780 active alternatively fuelled
commercial vehicles using Eurowag
products and services, 121% increase
on last year
@
Launched HVO refuelling network with
our first station at Ort im Innkreis, Austria
Customer success
and wellbeing
@
69% of customers surveyed
agreed Eurowag supported their
business success
@
74% of customers surveyed agreed
Eurowag supported their wellbeing
and safety
@
Our i.triglav mobile app won the
Diggit Gold Award in the User
Experience category, making
the roads safer for all
@
Held fourth annual “Delivering
Christmas” celebration of truck drivers
Community impact
@
79% of eligible employees participated
in the Philanthropy & You programme
for employee-led charitable donations
– surpassing the 1,000 employee
milestone for the first time
@
275 local good causes supported
across 14 countries
@
1.5% EBIT donated, through employee-
led donations, corporate charity
partnerships and disaster relief
Responsible business
@
Improved our CDP Climate Change
score from C to B
@
35% women in leadership roles
@
Launched Eurowag Women’s Network
@
Published new Speak Up
an Integrity Line
@
Published Codes of Conduct for
employees and suppliers
@
75% of employees completed human
rights training
Strategic Report Corporate Governance Financial Statements 55
EUROWAG Annual Report and Accounts 2023
Focus area: Climate action
Accelerating the energy transition
We are using our insight into the CRT industry’s needs to create the infrastructure and incentives to help customers make the transition towards a net zero future.
Priorities
Alternative fuel
1
technologies
@
Growing our alternative fuel charging and
payment acceptance network
@
Integrating alternative fuel offerings into our
products and services
@
Introducing a broader alternative fuel offering
to our clients (e.g. bioLNG
Collaboration and advocacy
@
Promoting alternative fuels to our customers
@
Advocating and promoting fair market and
policy framework conditions to speed up the
uptake of alternative fuels and enhance the
attractiveness of low and carbon neutral and
alternative powertrains
@
Acting as an honest broker on behalf of the
industry, transmitting customer feedback
and industry know-how to accelerate the
energy transition and decarbonisation of the
CRT sector
@
Partnering with other stakeholders and
platforms to be stronger together and to
showcase the sector, industry capabilities and
innovative products to policy makers, local and
regional authorities, and national governments
Customer service and incentives
@
Developing new advisory tools and services
to support customers’ energy transition
@
Creating incentive packages and affordable
financing solutions to accelerate customer
adoption of alternative fuels and the
decarbonisation of the CRT industry
Targets and progress Achievements
Growth in alternatively fuelled
commercial vehicles
We have seen growth in the number of vehicles
using a variety of fuels or power sources, which
have the potential to contribute to CRT
decarbonisation, including renewable fuels
number of alternatively fuelled commercial
vehicles that use Eurowag products and
services by 121%.
From LNG to bioLNG
We continue to operate pilot LNG refuelling
points at Eurowag truck parks Kozomin and
Modletice, and we added an additional 80 LNG
acceptance points, bringing our total LNG
acceptance network to 383 stations in 13
countries, while bioLNG has become available
in some stations. In 2023, our customers
increased the refuelled volumes of LNG by
83% compared to 2022, and with the Eurowag
fuel card, our customers have access to more
than 50% of available LNG stations in Europe.
Expanding HVO
In 2023 we launched a lower carbon fuel on
our own truck parks, when we started offering
HVO at Ort im Innkreis, Austria. We also
continued developing our acceptance network
for HVO by adding an additional 140
acceptance points, bringing the total to 165 in
seven countries. In 2023, our customers
increased the refuelled volume of HVO by
164%, compared to 2022.
New services for electric vehicles
Eurowag has become a shareholder of Last
Mile Solutions, one of the leading European
roaming platforms for eMobility. Together,
Eurowag and Last Mile Solutions will work on
implementing eMobility as a CRT service.
Notes:
1. Fuels or power sources which serve, at least partly, as a
substitute for fossil oil sources and which have the
potential to contribute to decarbonising and enhancing the
environmental performance of the transport sector,
including electricity, hydrogen, renewable fuels (biogas,
biofuels, synthetic fuels produced from renewable energy)
synthetic fuels produced from non-renewable energy).
Source: Alternative Fuels Infrastructure Regulation.
2. BioLNG, or liquefied biomethane, is a biofuel made by
processing organic waste flows, such as organic household
and industrial waste, manure, and sewage sludge. BioLNG
is a practically carbon neutral biofuel, as it utilises carbon
that is already in the system from renewable sources.
3. In order to better reflect the breadth of alternatives
available, we have modified and updated our methodology,
which newly includes biodiesel (to reflect the growth of
bioLNG and electric commercial vehicles.
80,000 active alternatively
fuelled commercial vehicles
using Eurowag products
and services by 2030
No longer offer fossil fuel
energy products by 2050
Active alternatively fuelled
commercial vehicles
780
3
121%
*
2023 780
2022 353
2021 262
Strategic Report Corporate Governance Financial Statements56
EUROWAG Annual Report and Accounts 2023
Sustainability continued
Focus area: Climate action
Helping customers reduce GHG emissions
To play our part in reducing GHG emissions across the CRT sector, we support our customers to improve the carbon efficiency of their trucks and journeys, through our suite of tools and services.
Priorities
@
Supporting more efficient driving by
monitoring and promoting an eco-driving
style through analysis, advice and incentives
– to save fuel and reduce emissions
@
Improving efficient logistics and reducing
empty journeys, through planning tools
@
Delivering smart navigation products and
route optimisation services, to minimise fuel
consumption
@
Consultancy services in the field of energy
efficiency and carbon reporting per
customer journey
@
Energy transition and alternative fuels
20% carbon intensity
reduction per tkm
by 2030 (gCO
2
e/tkm)
(baseline year 2019)
CO
2
emissions data methodology
We partnered with Smart Freight Centre, an
international non-profit organisation focused
on reducing the emissions impacts of global
freight transportation, to ensure that our data
insights and solutions are up to date with
recent methodological developments, fully
aligning all internal emissions calculation
and the
Global Emissions Logistics Council.
Route planning
We upgraded our advanced Route Planner to
help dispatchers easily plan the best and most
efficient route for their operations – thus
reducing fuel consumption, cost and
emissions. The planner now recommends the
best route based on individual truck attributes
and traffic and adds instructions to the drivers
for each activity.
Notes:
4. ISO Standard from April 2023 on quantification and
reporting of GHG emissions arising from transport chain
the EU to calculate logistic emissions.
Customers GHG emissions (gCO
2
e/tkm)
73.9 0.5%*
2023 73.9
2022 70.7
2020 71.7
2021 71.2
2019 74.3
Targets and progress Achievements
Improving driving behaviour
Our driving behaviour tools and telematics
data enable our customers to become safer
consumption. Our driver behaviour products
focus on giving customers and drivers
feedback, insights and tips to improve fuel
efficiency and reduce vehicle wear and tear. In
2023, the Group’s products that target driver
behaviour were used in 134,984 vehicles, and
the customer base for our Perfect Drive feature
increased by 101%, compared to 2022. We
introduced new functionalities, including trends
visualisation and driver benchmarking, giving a
specific score and tips for each driver, based
on real data.
CO
2
emissions tools for our customers
Knowing that measuring something is the first
step to better managing it, we further
developed our tools to help our customers
understand their emissions. Eurowag
telematics customers now have access to
emissions calculations for both the whole fleet
and individual vehicles, based on actual fuel
consumption over any selected time period.
From 2024, customers using Eurowag fuel
cards will be able to access emissions data for
each refuelling transaction.
Data note:
The emissions intensity of our customers’ journeys is
impacted by external factors, including vehicle and fuel
utilisation. Since mid-2022 the average weight and mileage
of journeys has decreased, creating an external context that
has slowed progress towards our customer emissions
reduction goal in the last year. We expect it is likely that in
2024 the gCO
2
e intensity will remain at a similar level to 2023.
Strategic Report Corporate Governance Financial Statements 57
EUROWAG Annual Report and Accounts 2023
Focus area: Climate action
Reducing our direct GHG emissions
Eurowag operates across 25 countries and has expanded rapidly thanks to recent acquisitions. Decarbonising our operations is a vital step on our path to net zero.
Priorities
@
Investing in renewable energy generation
technologies across our operating assets
@
Switching to renewable electricity for
our operations
@
Switching our car fleet to low and zero
emissions vehicles
@
Identifying opportunities to minimise
consumption in our operations
Considering our emissions have had a
significant increase due to the acquisition of
Inelo and its subsidiaries, since the target was
set with base year 2019, we have recalculated
our emissions and will re-state them as follows:
@
Scope 1 emissions: 2,907 tonnes CO
2
e
@
Scope 2 emissions – market: 1,978 tonnes CO
2
e
@
Scope 2 emissions – location: 1,721 tonnes CO
2
e
@
Scope 1 and 2 emissions – market:
4,885 tonnes CO
2
e
@
Scope 1 and 2 emissions – location:
4,628 tonnes CO
2
e
Therefore, our Scope 1 and 2 emissions
have decreased by 11% compared to
baseline year 2019.
Achievements
Solar energy
We expanded our total capacity for solar
generation by over 80% in 2023. Towards the
end of the year, we installed solar panels at
four assets in Poland. While operational only
for two months, they are already becoming an
essential part of our direct emissions approach
and should yield substantial savings in 2024.
Overall, we have installed solar panels at six
assets, with more to come in the coming year.
Switching to and retaining
renewable electricity
We continue to increase the proportion of
energy we purchase from renewable sources
for our own assets. In 2023, we switched our
headquarters in Prague to renewable electricity,
mitigating 400 tCO
2
e, a substantial proportion
of our Scope 2 emissions.
Focusing on reduction
We rationalised office space wherever possible
to reduce consumption and optimise operations.
We are opening more possibilities for employees
to access electric cars via our corporate fleet
and increased the number of EV chargers at our
Vysehrad office for employees to use, as well
as exploring possibilities for installing home
chargers. Our energy efficiency project to replace
refrigerated display cases and refrigerators in
the store and warehouse at the Modletice truck
park in Czech Republic saved up to 45 MWh/year.
Working with our suppliers
As part of our efforts to reduce Scope 3
emissions, we tendered for delivery services
with compensated carbon footprint and now
have certified climate neutral shipping services
from our partner DHL. We also financed the
leasing of two LNG trucks, which are now used
by BenzinTransit to deliver fuel to our stations.
50% reduction in Scope 1
and 2 emissions
*
(tCO
2
e)
from our own operations by
2030 (baseline year 2019)
* On a market basis.
Zero direct (Scope 1 and 2
market-based) GHG
emissions by 2040
Targets and progress
GHG emissions from Group operations,
Scope 1 and 2 market-based (tCO
2
e)
4,353 11%*
** This is the original figure reported in previous year,
excluding emissions from Inelo, Webeye and Sygic.
The re-calculated figure can be found to the left
on this page.
2023 4,353
2022 3,439
2020 2,612
2021 2,667
2019 2,604**
The majority of the movements in our reported
GHG emissions relate to the acquisition of Inelo
in 2023. The acquisition significantly increased
the scale of our operations, including employee
numbers, fleet and office space (predominantly
operating in CEE countries with inefficient grid
mix, which increased our intensity per sqm of
office space). The movement in employee
commuting emissions is due to improved data
methodology. The movement in emissions from
use of sold products is due to a 3% reduction in
volume of sold fuels and updated fuel emissions
factors. The movement in UK results is because
the London office opened in September 2023,
so 2024 was first full year of operations.
Strategic Report Corporate Governance Financial Statements58
EUROWAG Annual Report and Accounts 2023
Sustainability continued
GHG emissions reporting
Scope 1 and 2 and intensity metrics 2020 2021 2022 2023
Total energy consumption (kWh) 6,339,958 6,979,760 9,642,031
14,608,725
Scope 1 emissions (tonnes CO
2
e) 1,225 1,316 1,652 2,655
Scope 2 emissions (tonnes CO
2
e) – market-based 1,387 1,351 1,787 1,698
Scope 2 emissions (tonnes CO
2
e) – location-based 1,227 1,221 1,637 2,038
2
e) – market-based 2,612 2,667 3,439 4,353
2
e) – location-based 2,452 2,537 3,289 4,693
GHG intensity truck parks (tonnes CO
2
e/refuelling point) – market-based 6.52 6.68 6.70 7.07
GHG intensity offices (tonnes CO
2
e/thousand sqm) – market-based 39.52 36.51 54.19 57.79
GHG intensity truck parks (tonnes CO
2
e/refuelling point) – location-based 5.93 6.10 5.80 6.27
GHG intensity offices (tonnes CO
2
e/thousand sqm) – location-based 36.41 34.52 53.07 75.48
Scope 3 emissions (tonnes CO2e) 2020 2021 2022 2023
Purchased goods and services — 1,130,557 1,117,318 1,321,639
Capital goods — 403 434 882
Fuel and energy-related activities — 535 745 1,152
Upstream transportation — 1,699 1,834 1,746
Waste generated in operations — 55 57 63
Business travel — 306 787 1,227
Employee commuting — 628 772 666
Downstream transportation — 96 114 188
Use of sold products — 4,309,510 4,257,591 3,797,008
Total Scope 3 emissions — 5,443,789 5,379,651 5,124,571
Operations in the UK 2020 2021 2022 2023
Total energy consumption (kWh) — — 476 8,392
Scope 1 emissions (tonnes CO
2
e) — — — 6
Scope 2 emissions (tonnes CO
2
e) – market-based — — 0.17 3.10
Scope 2 emissions (tonnes CO
2
e) – location-based — — 0.11 1.87
2
e) – market-based — — 0.17 9.15
2
e) – location-based — — 0.11 7.9 3
Strategic Report Corporate Governance Financial Statements 59
EUROWAG Annual Report and Accounts 2023
Focus area: Customer success and wellbeing
Helping SMEs transport businesses to thrive
Most of our customers are small or medium-sized businesses. Many of them struggle to compete due to their size and access to financing, tools and know-how. By offering benefits and services
at attractive terms, we help them compete, grow and expand into new segments.
Achievements
Digital office for our customers
In 2023, we progressed in our efforts to
streamline access to all our services in an
integrated digital ecosystem. We have
introduced new features, including an upgraded
finance module, map module, telematics, driver
messaging and mobile payments for refuelling
from two pumps at the same time, saving time
for customers. The digital platform will enable
us to drive awareness and incentivise uptake
of our product features that increase efficiency
and decrease emissions to more customers
and drivers, thereby growing our data insights
for further product development.
The Fuelio app added new features
The Fuelio app helps customers manage their
fuel consumption and expenses, as well as
driving habits. Premium features launched in
2023 include a new route planning tool offering
real-time monitoring of local fuel prices, and
Fuelio became one of the best fuel-logging
apps on the market, downloaded over 5 million
times, with an active user base of 1.2 million.
Case study
Cold chain monitoring
Hauliers often face challenges when transporting
thermosensitive goods. Our Eurowag telematics
fleet management solution offers enhanced options
to ensure the safe transportation of medicines,
foodstuffs and cosmetics.
This use case for cold chain in the market is generally
considered complex and hard to change, so a solution
that makes improvements in efficiency is impactful for
shippers and customers and can contribute to avoiding
food waste, a major environmental issue in Europe.
Priorities
@
Becoming the ultimate on-road digital
mobility platform, boosting efficiency and
creating better business opportunities
across the industry
@
Creating technological solutions that
boost efficiency
@
Providing affordable financial services to
support customers’ energy transition
@
Offering anti-fraud systems to reduce fuel theft
@
Connecting trucking companies with
merchants, shippers and regulators, and
providing vital information to help grow
their businesses
Customer survey results on business
69%
2023 69
2022 66
2021 65
Progress
Anti-fraud systems
In 2023, we prevented the theft of more than
1 million litres of fuel, equivalent to 30 tankers
of diesel. By preventing fuel thefts, we protect
our customers’ money, which they can utilise
to modernise fleets and improve company
operations. In 2023, we decreased clients’ losses
11% more compared to 2022, even though the
number of fuel fraud cases grew by 11%.
Mobile payments
In 2023, we added another 417 POS to the
Eurowag Pay solution, almost doubling the
number of sites, including activating this service
for the first time in Denmark and Luxembourg,
bringing the total number of mobile payment
POS to more than 800 in 13 countries – making
life easier and safer for customers.
Working time management
Through the acquisition of Inelo in 2023,
Eurowag gained a suite of solutions to assist
customers with analysing and settling working
time, and verifying potential tampering with
tachographs, ensuring transport companies
operate according to current legislation.
EETS
Customers use our EVA OBU that can manage
toll payments in multiple countries, with just one
device. We offer toll services in 23 countries and
five tunnels across Europe. In 2023, OBU sales
increased almost four times, compared to 2022.
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Sustainability continued
Focus area: Customer success and wellbeing
Improving wellbeing and safety for truck drivers
Truck drivers encounter various difficulties while on the road, including feelings of isolation, stress or concerns about physical health and safety. We are committed to improving the overall
wellbeing and safety of truck drivers. Through our diverse range of products and services, we strive to improve safety whilst driving and foster a stronger sense of community among truck drivers.
Additionally, we consistently prioritise maintaining the standards of quality and security in our facilities, including truck parks, to ensure the safety of our customers.
Priorities
@
Building drivers’ social network through our
digital platforms
@
Improving the quality and security of
facilities for customers at truck parks
@
Introducing tech services to improve driver
behaviour and safety, including wrong way
warnings, line crossing and flagging
distracted driving
Progress Achievements
Facilities for drivers
In order to support drivers’ wellbeing, in 2023
we fully refurbished our shop in Modletice,
Czech Republic. We built new social buildings
in the Szigetszenmiklos truck park in Hungary,
and are refurbishing the restaurant in Araia,
Spain, in order to transform it into social
restrooms for drivers.
Rescue lane warnings
Our new Emergency corridor feature, available
now to Sygic’s Premium+ users, can help save
lives. It alerts the driver in situations which
may require a quick response and offers visual
instruction to assist drivers in safely navigating
around emergency vehicles.
Event for truck drivers
We continued our annual “Delivering Christmas”
events for the fourth year on our truck parks in
the Czech Republic, Slovakia, Poland and
Spain. We also held Eurowag Truckers’ Day on
19 April for all drivers visiting our Llers station
in Spain, to celebrate the crucial role that truck
drivers play in our economy.
Expanding road services for drivers
We have added 176 parking sites to our network
of 506 parking sites across Europe, where
drivers can now use the Eurowag card to pay
for additional services, including truck washing,
tank cleaning, truck repairs and ferry bookings.
We offer washing and tank cleaning services
at our truck park in the Czech Republic and at
acceptance networks or partner co-operation
locations at a total of 1,105 sites across Europe.
We have added 132 to a total of now 572 sites
that offer truck repair services across Europe
via partner co-operation. In 2023, we had 1,955
ferry booking transactions via our Eurowag
solutions, an 80% increase from last year.
Driver scoring and feedback
Our wide offering of telematics solutions allows
drivers and dispatchers to monitor driving
scores, improve driver safety and reduce fuel
consumption. In 2023, these features were
used by more than 130,000 drivers.
Customer survey results on wellbeing
74%
2023 74
2022 70
2021 73
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EUROWAG Annual Report and Accounts 2023
Focus area: Community impact
Making a positive impact in our local communities
Eurowag serves diverse communities across Europe’s patchwork of countries – many of which face considerable challenges. We strive to make a positive impact everywhere we operate,
through employee-led philanthropy and volunteering as well as corporate donations and partnerships.
Priorities
@
Delivering an impactful CSR programme
@
Employee-led philanthropy and enabling our
employees to volunteer at local charities,
supporting local good causes
@
Corporate donations and partnerships,
including disaster relief and supporting
customers’ families who have lost
loved ones during their work as
professional drivers
Volunteering
In 2023, we expanded the opportunity for
employees to volunteer their working time and
skills, broadening from the Czech Republic to
encompass all our markets, and all employees
are now entitled to make use of one day of
volunteering with non-profit organisations.
Disaster relief
Eurowag match-funded employee donations to
support communities affected by the February
earthquake in Turkey and the August flooding
in Slovenia; the combined donation was over
€40,000. We also donated €10,000 to support
people impacted by the war in Ukraine.
Movember
We supported Movember with a number of
activities, including mental and physical health
workshops in our Prague headquarters and
match-funding employee donations.
Progress
Eligible employees participating in
Philanthropy & You
79%
The marketing department joins forces with the retirement home Háje for a day trip to the Czech National Museum. Employees
provided local seniors, including many with physical disabilities, with a guided tour through the museum.
Achievements
Eurowag colleagues giving back
In 2023, we donated €246,000 to 275 local
charities and good causes in 14 countries via
employee-led philanthropy, with over 1,000
employees participating in the Philanthropy &
You programme.
Corporate charity partnerships
Eurowag donated €10,000 to support the
TruckHELP Foundation, helping children who
have lost a family member on the road. We are
also forming a new partnership with Keep
Hope Alive in Romania, which champions safer
roads and more sustainable transport, as the
first step in our plan to expand our corporate
partnerships beyond the Czech Republic in the
coming year. We will focus our efforts in three
main areas: road safety and truck driver
wellbeing, diversity in the tech sector, and
research and development into sustainable
and efficient transport innovations.
Philanthropy & You 2020 2021 2022 2023
Employee participation 76% 81%
84%
79%
Number of good causes supported 190 246 227 275
94 239 150 246
Number of countries where projects
were allocated 13 14 14 14
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EUROWAG Annual Report and Accounts 2023
Focus area: Responsible business
Employee engagement and DEI
We believe that our greatest strength lies in the diverse perspectives, experiences and backgrounds of our people. By focusing on DEI and employee engagement, we want to cultivate a workplace
where everyone feels valued, respected and empowered. We are taking actions to create a workplace where everyone’s uniqueness is not just accepted, but celebrated.
Priorities
@
Open and inclusive communication
@
Boosting employee engagement by addressing
two-way communication improvement and
systems and processes alignment
@
Promoting DEI with an initial focus on women
in leadership
@
To be a preferred employer in the markets
where we operate, providing an inclusive,
open culture with high-quality professional
development opportunities and benefits
@
Offering mentoring to colleagues
40%
women in leadership roles by 2025
Top 25%
employee engagement
score benchmarked against
EU tech companies by 2025
Achievements
Women’s Network
We launched Eurowag Women’s Network as
part of our commitment to promoting diversity
and inclusion in the workplace. Our goal is to
create a supportive community for women in
all parts of our organisation and to work
towards increasing the representation of
women in leadership roles. We are preparing to
launch a women’s mentoring scheme in 2024.
Inclusive recruitment
In March, the position of culture, diversity and
inclusion specialist was created, responsible
for designing, implementing and delivering the
DEI strategy and actions. The strategy includes
inclusive recruitment, learning and development
opportunities, and engagement and community.
As part of our Group equal opportunities,
anti-bullying and anti-harassment Policy, we
explicitly prohibit discrimination of people with
disabilities and outline guidance for managers
as well as employees who may have a disability.
Our policy covers direct and indirect
discrimination, unjustified and less favourable
treatment because of the effects of a disability,
and failure to make reasonable adjustments to
alleviate disadvantages caused by a disability.
Women in tech
We supported the tenth annual International Day
of Girls in STEM in Slovakia. The event, organised
by local non-profit AjTyvIT, seeks to empower
young women to pursue careers in traditionally
male-dominated fields, including IT. Our
colleagues from Bratislava helped contribute
to the event’s overall success and we are
expanding our partnership with AjTyvIT as part
of our community impact programme for 2024.
Employee engagement
In 2023, our annual engagement survey had a
fantastic 89% participation, but our overall
engagement of 60% represented a drop from the
previous year. Whilst this was disappointing, we
understand the reasons why, as the survey came
on the back of a challenging year of change
and restructuring, as well as our acquisition
of an additional circa 700 employees. In 2023,
we additionally surveyed employees in our
acquired companies, to measure engagement
post-merger. The open and honest feedback
from employees gives us an opportunity to
continue to focus our efforts on the things they
tell us matter most to them. During the year,
we also focused on two-way communication,
through events that included all-employee
Town Halls, Ask Martin Chief Executive Officer
events, informal Q&A sessions across our office
network, and regular Group News sessions.
Workplace wellbeing
We offer accessible resources for mental
health and overall wellbeing to employees,
including psychological consultancy through
the online platform Mojra. To further improve
the working environment of our employees, we
completed the transformation of the seventh
floor in our Prague headquarters office into a
relax zone, and relocated the Romanian and
northern Spain Webeye teams to new offices.
Sustainability continued
35% 4pp*
2023 35%
2022 31%
2021 28%
Targets and progress
Our engagement score
60% 6pp*
2023 60%
2022 66%
Strategic Report Corporate Governance Financial Statements 63
EUROWAG Annual Report and Accounts 2023
Priorities
@
Promoting sustainable supply chain
practices and responsible procurement
@
Operating ethically and with integrity,
including anti-corruption and responsible
selling and marketing
@
Promoting transparency and regulatory
compliance
@
Upholding customer privacy and data
security, including cyber security
Focus area: Responsible business
Responsible business practices
We strive to uphold the highest ethical and responsible business and industry standards in our daily operations.
Human rights
Following the human rights risk assessment
we undertook last year, in 2023 we rolled out
human rights training for employees and Board
members. 75% of employees completed the
training during the year.
Code of Conduct
We have updated our Code of Conduct for
employees and distributed an updated Code
of Conduct for suppliers, featuring social
standards including human rights, anti-
corruption, modern slavery, child labour and
Progress and achievements
Employees who
completed training
Professional
psychology
Professional
self-study
Professional
self-study
Professional
self-study –
Eurowag new
hires induction
programme
2021 15 400 201 301
2022 19 140 260 284
2023 57 284 260 242
Employees who
completed training
Fire protection
for managers
Fire protection
for employees
Occupational
safety for
managers
Occupational
safety for
employees
2021 23 409 17 425
2022 51 521 49 507
2023 50 487 47 479
other ethical topics. The Code has also
provided a confidential and easily accessible
concerns about unlawful or unethical conduct,
which is now available to all our employees,
suppliers and customers.
Employee training
We continue to roll out training in areas of
anti-bribery, AML and partner screening,
anti-trust, whistleblowing and human rights. In
2023, we added specialised training on human
rights and modern slavery. The completion
rate of compliance training in 2023 was 90%.
Sustainable procurement
We kicked off a project to deepen and
systematise our sustainable supply chain
practices, engaging purchasing colleagues
from across the Group businesses, to improve
the sustainability of our supply chain and
compliance with current and forthcoming
legislation.
Data protection and
information security
In 2023, we strengthened our focus on cyber
security, building a transparent and compliant
Information Security Management System
tailored to our business needs and compliant
with London Stock Exchange legislation. Our
focus was centred on adapting to evolving
cyber security threats, mainly achieved by
improving perimeter security and
strengthening security measures in user
communication.
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Case study
Engaging our employees to bring
our purpose to life
In 2023, our focus within employee engagement
was to improve two-way communication, which was
rated low by employees in previous surveys. We
achieved this through opening tailored
communication channels between management
and employees. With functional All Hands
employees monthly, we share important Group-
wide and function-specific news and updates, as
well as directly respond to local questions to
management.
At our all-employee Town Halls, we share updates
on our business performance and our financial
results. Over 1,000 employees attended to hear
about our interim results in September 2023.
Regular opportunities for employees to learn about
specific areas of the business are provided via
employees in attendance at every session. All
meetings support both in-person and online
attendance and are accessible for colleagues from
all parts of the Group. This includes colleagues
from our newly acquired companies.
As the business grew significantly in 2023,
we are now in the process of updating our Culture
Manifesto as part of our ongoing cultural change
journey. We launched a People and Culture
Ambassadors network during 2023, comprised of
40 colleagues who represent different parts of the
Group. They work together on behalf of all our
colleagues to help us continue to nurture a culture
where our employees understand our purpose, live
our values and understand our strategy and the
part they play in making us successful.
Going forward, we will focus on improving our
employee experience and building a purpose-led
culture across all subsidiaries. Helping to create a
clean, fair and efficient CRT industry is our reason
for existing, and engaging our employees in that
vision is vital for ensuring that it sits at the heart of
everything we do, guiding our decision-making
and actions. In 2024, we will roll out a series of
workshops with all employees, with the aim that
everybody feels connected to our purpose and
understands how they can take tangible actions
to play a part in bringing it to life.
We launched a People and Culture Ambassadors network during 2023,
comprised of 40 colleagues who represent different parts of the Group.”
All Hands meetings
attended on average by
1,000-1,200
employees monthly
Strategic Report Corporate Governance Financial Statements 65
EUROWAG Annual Report and Accounts 2023
Climate risk and TCFD statement
TCFD
Climate change and energy transition represent both a risk and an opportunity for the Group. Our
reputation, operating and compliance costs, and diversification of revenue may be influenced by
our pace of action, the pace of the energy transition in the CRT sector, and our customers in the
short, medium and long-term. We currently derive a significant portion of our revenue from fossil
fuels payment transactions. We note that changes in road transport policy and regulations, the
cost of carbon, carbon taxation, changes in market demand for alternative fuel and clean mobility
solutions, and the pace of adoption of low-carbon powertrains by our customers can all influence
the level of risk and opportunity for the business. We also recognise that extreme weather events
could pose a risk to business continuity for our physical assets and the need to monitor the impact
of such events on the health, safety and wellbeing of our workforce and customers. In addition,
we have made a commitment to reduce our own carbon footprint, as well as to offer solutions to
help customers make the transition to a more efficient and lower carbon future.
The following disclosure is consistent with the TCFD recommended disclosures. The TCFD
framework allows the Company to report consistently on the impact of the climate-related risks
and opportunities identified under different climate scenarios on all aspects of its business.
It also allows Eurowag to assess its resilience to those risks and opportunities as well as how
these might impact strategy and financial performance.
This section sets out Eurowag’s climate-related financial disclosure, current approach, and future
plans consistent with all of the TCFD recommended disclosures, in compliance with the FCA Listing
In preparation of this TCFD statement, we also considered the supplemental guidance for the
Transportation Group given our connection with the trucking service industry. Eurowag has
focused on the potential impacts flagged by the guidance through our assessments of risks:
@
The Group has assessed our inability to keep the pace with the rapid shift in regulation and
policy requirement as well as the customer viability due to an increased price of fossil fuels
@
The Group is committed to support the CRT sector move to a low-carbon economy by offering
new tools and technologies to our customers. Electrification of the CRT sector is seen as an
opportunity for Eurowag
@
The Group’s targets are aligned with the transition towards a lower carbon future, where
alternative fuels represent a higher proportion of the energy delivered to our customers
(see page 56, the Helping customers reduce GHG emissions section).
Our approach in this area is evolving in-line with developing best practice.
Governance
Board’s oversight of climate-related risks and opportunities
Current approach
The Board oversees climate-related risks and opportunities as part of its overall consideration
of our sustainability strategy. It also oversees climate risks specifically through the Audit and
Risk Committee, which reviews principal risks. Sustainability is covered at every Board meeting
(therefore at least quarterly) through an update from the VP of Sustainability and CSR on the
activities of the ESG Executive Committee, or as part of the CEO report.
In 2023, the Board participated in climate training covering the physical science basis and
regulatory, investor and corporate trends, delivered by external advisors specialised in sustainability.
With continuously growing expectations and pace of action on climate-related risks, the full
Board will receive more comprehensive updates, from 2024, as part of the CEO report.
Eurowag will continue to review and, if necessary, adapt the Group’s governance process to
ensure alignment with emerging good practice.
Strategic Report Corporate Governance Financial Statements66
EUROWAG Annual Report and Accounts 2023
TCFD continued
The role of management in assessing and managing
climate-related risks and opportunities
Current approach
At a management level, the ESG Executive Committee is responsible for identifying, assessing,
and managing climate risks and opportunities, and escalating to the Group risk function to ensure
climate risks follow the risk management framework, and reports to the Board bi-annually. The
Committee is facilitated by the VP of Sustainability and CSR and comprises: the Chief Executive
Officer, Martin Vohánka; several members of the Executive Committee; and with members from the
Senior Leadership Team including representatives from legal, human resources, communications,
commercial and investor relations. The Chief Executive Officer also provides updates to the Board
on sustainability and climate change risks and opportunities. The Board has overall responsibility
for managing risks. Currently, transition risks are part of the control framework for the Group.
Climate-related regulatory, compliance and policy risks are captured as part of the risk process.
The VP of Sustainability and CSR, who is a member of the ESG Executive Committee, has overall
responsibility of the execution of the Group’s climate strategy. The VP of Sustainability and CSR
has functional responsibility for defining and driving the Group’s climate-related strategy, whilst
other members of the ESG Executive Committee are responsible for delivering the strategy within
their respective functions. The ESG Executive Committee tracks and monitors the Company’s
performance and progress towards meeting our GHG targets.
In 2021, we introduced a formal ESG policy that codifies and sets out our governance and approach
for integrating sustainability into our business, which is also used for monitoring and reporting on
progress. In addition, in 2023, ESG performance constituted 10% of Executive Committee
members’ bonuses, which reflects a clear alignment of ESG matters and our business strategy.
We have a Sustainability function to help ensure sustainability is embedded into every part of our
decision-making processes across the Group, through close working with representatives across
the business who are responsible for the day-to-day delivery of the sustainability strategy.
Eurowag’s governance structure for climate-related risks and opportunities is summarised in the
graphic on page 53.
Our approach in this area is evolving in-line with developing best practice. We are also planning
to review and update our ESG policy in 2024.
Going forward, we will review the climate risks associated with any M&A activity as well as
country level activities that could create climate-related risks or opportunities for the Group.
Strategy
The climate-related risks and opportunities the organisation has
identified over the short, medium and long-term
Current approach
The heart of our sustainability strategy is helping our customers compete and succeed in a low-carbon
future. We have also made commitments to reducing our carbon footprint in our operations and supply
chain and to reach net zero by 2050. The strategy is informed by our materiality assessment. In 2022,
we identified short to long-term climate-related physical and transitional risks and opportunities
through a series of workshops with business units and functional leaders. The timeframe for these
risks is as follows: up to one year for short-term, from the end of the short-term reporting period up
to five years for medium-term, and more than five years for long-term. During the workshops, we
The climate-related risks and opportunities identified are presented in the table starting on page 71.
Eurowag will continue to monitor external tools and the latest climate science to assess the
physical and transition risks associated with climate change, and will report on how this has
guided our strategy in future reports.
The Company plans to undertake a review of the scenario exercise in 2024, as well as reviewing
its net zero strategy and exploring the opportunity to set SBTi-aligned targets.
The impact of climate-related risks and opportunities on the
organisation’s businesses, strategy and financial planning
Current approach
Eurowag quantified the impact of the identified climate-related risks and opportunities where
possible, and has expanded the number of risks and opportunities that were quantified in 2023.
Risks and opportunities have been assessed for their impact on the Group’s EBITDA. A gross risk
rating has been given to each risk identified. The results are presented in the table starting on
page 71.
Climate was considered as part of the preparation of the Viability Statement (see the Viability
of climate-related risks and opportunities are integrated with the assessment and review of all
change has been designated as a principal risk (see the Principal risks register section on page
identified on page 71 to 75. The impact has been classified as per the table on page 71.
Strategic Report Corporate Governance Financial Statements 67
EUROWAG Annual Report and Accounts 2023
We reviewed the risk of flooding for our physical assets, primarily our truck parks, and updated
the assessment for our acquired assets. We modelled the financial impact using public data from
truck parks in Spain. The Group’s reputation, operating and compliance costs, and diversification
of revenue may be influenced by our pace of action, as well as the pace of the energy transition
within the broader CRT-enabling ecosystem and by customers in the short, medium and
long-term. The energy transition poses challenges for our small and medium-sized customers,
including the availability of sufficient charging and alternative fuel networks, rapidly evolving and
yet unstable regulation raising business risk significantly, uneven approach on taxation and
subsidy programmes across Europe, and limited availability of viable battery and alternative fuels
trucks for CRT in the near term, all of which affect transition risks and the total cost of ownership
as key drivers for mass adoption of sustainable alternatives.
We also recognise that extreme weather events could pose a risk to business continuity, not only
for our physical assets but also for the health and wellbeing of our workforce. The Group also
recognises that it is imperative to take responsibility to reduce its own carbon footprint (see our
to help its customers make the transition to a low-carbon future.
To address these risks and the opportunities, we are:
@
@
Investing in eMobility solutions, including signing the Memorandum of Understanding with
50five for the commencement of a partnership to support the CRT sector with electric vehicle
charging solutions
@
Investing in digitisation and technologies to improve efficiency within the CRT ecosystem and
thus decrease energy intensity per tonne of transported goods
@
Exploring how carbon reduction for our operations as well as investment in products and
services to support customers with efficiency and emissions reductions will be a factor in
capex investment decisions
The risk, finance, strategy and sustainability functions will continue to work together to ensure regular
reviews are in place to assess the impact of our climate-related risks and related mitigation measures.
The resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios, including a 2°C
or lower scenario
Current approach
We have identified various climate-related risks and opportunities following the series of
workshops completed in 2022.
The Company utilised three scenarios to identify physical and transitional climate risks and to
test the Group’s resilience. This included a 1.5°C scenario, where action taken around the world
has achieved the aims set out in the 2015 Paris Agreement – global temperature growth has been
limited to 1.5°C, compared with pre-industrial levels. But that does not mean everything is the
same as today. There have been some physical changes and achieving this goal has required
a substantial shift in policy and behaviour.
We also explored a second scenario of a 2°C world, where change ebbs and flows in the
consciousness of leaders and the general public alike. Some action has been taken, but it’s
very much business as usual and global temperatures continue to climb, albeit slowly. And the
impact is clear to see.
Finally, we considered a 3°C scenario where economies around the world have continued to be
powered by fossil fuels and promises made by global leaders have been largely ignored. Life has
continued much the same. As a result, the planet is in crisis and well past the point of no return
by 2030. Global warming has accelerated. This is not doomsday, but the changes in climate are
everywhere, tangible, and in some cases catastrophic.
In 2022, Eurowag developed a roadmap to reach net zero by 2050. By implementing this
roadmap, we aim to support our customers’ transition to a low-carbon world and thus reduce
the Company’s exposure to potential climate-related risks and strengthen our ability to capture
opportunities (see our net zero roadmap in the Sustainability report).
Please see page 47 for the Company’s Viability statement and more detail on the resilience of
Eurowag’s business strategy.
Eurowag will continue to ensure that our business strategy and management approach are
resilient when considering these different plausible futures.
The risk and sustainability functions will continue to review the business continuity plans for
assets in order to ensure that considerations from the climate scenarios are taken into account
in the plans. Eurowag will also review the scenario exercise in 2024.
Strategic Report Corporate Governance Financial Statements68
EUROWAG Annual Report and Accounts 2023
TCFD continued
Risk management
The organisation’s processes for identifying and assessing
climate-related risks
Current approach
The Board is responsible for overseeing climate-related risks and opportunities.
In 2022, the sustainability function initiated a series of workshops with the business units and
functions to identify and assess climate-related risks, using scenario analysis to identify those
risks. As part of the overall risk management process, climate risks are escalated to the risk
function which then prepares the risk update for the Audit and Risk Committee. This Committee
reviews the climate-related risks and opportunities and designates climate change as a principal
In 2023, the finance function assessed and quantified the climate-related risks and opportunities
to long-term timeframe, defined on page 71. The identified risks are assessed at different levels
of the business focusing on both financial and strategic impacts.
Going forward, we will review the climate risks associated with M&A opportunities and post-
acquisition integration, as well as country level activities that could create climate-related risks
or opportunities for the Group.
The organisation’s processes for managing climate-related risks
Current approach
Eurowag began assessing climate-related risks and opportunities in 2021 as part of the
materiality analysis and completed its scenario analysis in 2022. Following the identification of
climate-related risk and opportunities, Eurowag outlined a number of initiatives to reduce its
operational and supply chain emissions, as well as developing products and services to help its
CRT customers reduce their emissions. This process included the review and development of
opportunities with individual business units. The business units have included prioritised plans
for climate mitigation in their annual plans.
The VP of Sustainability and CSR is responsible for co-ordinating the management of climate-
related risks across Eurowag. This includes setting the Company’s climate strategy, which
includes its GHG reduction targets; collecting and analysing environmental data to identify
hotspots; defining and agreeing reduction plans; and engaging functions’ leadership teams.
The energy and carbon intensive nature of our business, reflected in our GHG emissions data, is
one of the main drivers for most of the risks presented in our climate-related risks and
continued to closely monitor and review its emissions data across Scope 1, 2 and 3, and focused
on the following reduction activities:
@
We have reduced our Scope 1 and 2 market-based emissions by 11% in 2023, compared to our
2019 baseline (see page 57 for a note on how our baseline has been adjusted to derive this
figure). This has been achieved through measures that include doubling our on-site renewable
energy generation and installing PV panels at our truck parks
@
With Scope 3 being the largest share of our GHG emissions, we continued to reduce our
customers’ energy intensity compared to 2019, expanded our HVO network, added new LNG
acceptance points to expand our LNG network, signed a Memorandum of Understanding with
50five for the commencement of a partnership to support the sector with an EV charging
solution. To find our more, please see our climate action focus area on page 55 and our
Sustainability report available on our website
As mentioned, Eurowag plans to undertake a review of the scenario exercise in 2024.
Integration of the processes for identifying, assessing and managing
climate-related risks into the organisation’s overall risk management
Current approach
Climate change risk is a principal risk and is assessed alongside the Company’s other principal
risks as part of the overall risk management framework (see the Principal risks register section
the overall risk management is as follows:
@
Climate change risks are evaluated in-line with the risk management framework and following
the accepted system of three lines of defence
@
As part of the overall risk process, climate risks are escalated to the risk function, which then
prepares the risk update for the Audit and Risk Committee. This Committee reviews the
climate-related risks and opportunities and designates climate change as a principal risk
@
Climate risk is treated like other risks (e.g. people, technology, etc.)
Eurowag will continue to monitor external tools and the latest climate science to assess the
physical and transition risks associated with climate change, and will report on how this has
guided our strategy in future reports.
Strategic Report Corporate Governance Financial Statements 69
EUROWAG Annual Report and Accounts 2023
Metrics and targets
The metrics used by the organisation to assess climate-related
risks and opportunities in-line with its strategy and risk
management process
Current approach
In 2022, Eurowag started to quantify the financial impact of climate-related risks, focusing on
physical risks. In 2023, we have strengthened our methodology for quantification and expanded
the scope to cover both physical and transitional risks.
Eurowag has disclosed annually its Scope 1 and 2 (both location and market-based) as well
as its Scope 3 emissions in the Annual Report and Accounts. The Company also publishes
Eurowag will continue to monitor and disclose climate-related metrics on an annual basis.
GHG emissions and their related risks
Current approach
Eurowag has disclosed its Scope 1 and 2 (both location and market-based) as well as its Scope 3
GHG emissions for the last three years in the Company’s Annual Report and Accounts and its
CDP 2023 submission.
These calculations can be found on page 58.
We will continue to refine our approach to quantification of climate risk as new external tools
and information are being released, keeping a close eye on any new development.
Targets
Current approach
We have set a target to reduce our absolute Scope 1 and 2 (market-based) emissions by 50%
by 2030, from a 2019 baseline. In 2022, we also received approval of a new set of targets to
drive the decarbonisation of our value chain, including a net zero target by 2050.
The full set of targets can be found on pages 55 to 63, and more information can be found in
our Sustainability report available on our website, regarding targets, progress, and activities.
These targets include a range of actions that will help us become net zero by 2050, while
acknowledging business growth in the short, medium and long-term. This includes the following
operational targets:
@
80,000 active alternatively fuelled commercial vehicles using Eurowag products and services
by 2030. This target is dependent on the penetration of alternative vehicles in the market.
The risk of us not meeting this target is therefore directly correlated to the success of the
penetrations of alternative vehicles in the market. The potential financial impact of that risk is
expected to be minimal for us. Our product and service offering is suitable for alternative
trucks as well as for the more traditional segment of ICE vehicles, therefore not meeting the
target would not pose a direct impact to our revenues.
@
No diesel-related products in Eurowag’s portfolio by 2050
@
20% carbon intensity reduction per tkm by 2030 (gCO
2
e/tkm) of Eurowag telematics customers
The ESG Executive Committee will review progress towards these targets and report annually
through the Annual Report and Accounts.
Our business growth related to acquisitions has meant that the targets set a few years back
do not fully reflect the total business scope of activities and geographies. We are evaluating
and refreshing these short-term targets, starting from a new baseline that captures the scale
of our business to date, and that will in turn better inform the actions we need to take to reduce
our emissions in-line with our long-term net zero ambition.
Strategic Report Corporate Governance Financial Statements70
EUROWAG Annual Report and Accounts 2023
TCFD continued
Scenario analysis
Introduction
To comply with the TCFD recommended disclosure on strategy,
Eurowag carried out a climate scenario analysis. Through three
workshops, involving 25 participants from key business units
and functions, the Group aimed to identify the resilience of its
strategy under three possible climate futures; identify physical
and transition risks and opportunities; and identify actions to
mitigate risks and capture opportunities. With the support of
external experts, three scenarios were created. The three
scenarios were built based on publicly available scenarios from
the Intergovernmental Panel on Climate Change (“IPCC”)
Representative Concentration Pathways (“RCPs”) and Shared
Socioeconomic Pathways (“SSPs”), International Energy Agency
(“IEA”), and Principles for Responsible Investment Inevitable
Policy Response (“PRI IPR”). The three scenarios are
summarised in the section below. Our scenarios describe the
pathway towards different temperature outcomes by 2100.
Because scenarios are models, rather than precise predictions of
the future, they describe changes on a decadal level. They use a
mix of qualitative and quantitative information and were applied
through four lenses: assets and employees; business model;
supply chain; and customers. We used a number of sources,
which contribute insights on different elements of climate
change. The IPCC RCP scenarios are about physical changes,
the SSPs are focused on wider societal changes and the IEA
scenarios provide specific insights on electrification of transport.
To that end, the different scenarios help inform different parts of
our analysis.
Scenario 1
A better world (1.5˚C)
Y
Page 71
Scenario 2
An uncertain and
volatile world (2˚C)
Y
Page 73
Scenario 3
An irreversible world (3˚C)
Y
Page 74
Eurowag scenarios
Summary
Action taken around the world
has achieved the aims set out in
the 2015 Paris Agreement
– global temperature growth has
with pre-industrial levels. But
that does not mean everything
is the same as today. There have
been some physical changes
and achieving this goal has
required unprecedented shift in
policy and behaviour.
Not much has changed from
today. Climate change ebbs and
flows in the consciousness of
leaders and the general public
alike. Actions have been taken to
meet current and expected
pledges made by global leaders.
Global temperatures continue to
climb, albeit slowly, reaching 2ºC
by 2100. The impacts become
clear to see for many over the
Economies around the world have
continued to be powered by fossil
fuels and promises made by
global leaders have been largely
ignored. Life has continued much
the same. As a result, the planet
is in crisis and well the past point
of no return by 2030. Global
warming has accelerated. The
changes in the climate are
everywhere, tangible and in some
cases catastrophic. They
continue to worsen and become
more pervasive as temperatures
climb above 2ºC by the 2040s.
External scenarios
IPCC scenarios
RCP2.6/SSP1 RCP4.5/SSP2 RCP6.0/SSP5
IEA scenarios
Global EV Outlook: Sustainable
Development Scenario (“SDS”)
Global EV Outlook: Stated &
Expected Policies Scenario
(“STEPS”) and SDS
—
Other
scenarios
Scenario
—
Other data
sources
Climate Analytics, Climate Impact Explorer; Climate Central, Surging Seas: Sea Level Rise Analysis;
Strategic Report Corporate Governance Financial Statements 71
EUROWAG Annual Report and Accounts 2023
Risks and opportunities
The risks and opportunities that were identified as part of the climate scenario analysis
are summarised in the below table. We defined likelihood and timeframe as follows:
Scenario 1: A better world (1.5°C)
Category Type Description Timeframe
Risk evaluation
Management approach Impact description
Impact on
EBITDA Likelihood
Gross
risk rating
Physical risks
Acute
Inability of employees reaching their
workplace due to acute extreme weather
events such as droughts or flooding.
Disruption to
business operations
and occasional
office closures.
L
Eurowag has an established hybrid working from home
pandemic.
Transition risks and opportunities
Policy and
legal/
market
Rapid shift in regulation and policy
accelerating the phase-out of fossil fuels in
Europe. The impact could vary depending on
the nature of the policy, the country and the
impacts on different types and segments of
the CRT sector.
Decline in revenue
from fossil fuel.
H
Our current payments and mobility solutions business
model, and our commitment to play a role in the transition
to low-carbon economies will allow us to ensure a shift in
our products and services offering. Our approach is energy
agnostic, and we are able to provide access and process
transactions for fossil fuels, alternative fuels and electricity.
Timeframe # of years
Short 1
Medium 5
Long
Likelihood
Low Rare/unlikely to materialise
Medium Possible to materialise
High Likely/almost certain to materialise
Likelihood
Medium
High
(Almost
certain)
Rare (Low)
Insignificant 5% Catastrophic
Impact on EBITDA
Eurowag defined the evaluation of the gross risk, as per the table below, which aligns with
evaluation used to assess our principal risks on page 40. Please note that we evaluate here the
gross risk rating based on the likelihood that a risk or opportunity materialises and its impact on
EBITDA. The management approach column in our risks and opportunities table shows our
approach to mitigate those risks. At present, we feel like our approach is robust enough to
mitigate those inherent risks.
Key
Timeframe
Short Medium Long
Gross risk rating
High CriticalMediumLow
Likelihood
HighMedium Low
L M H
Type
Risk Opportunity
Strategic Report Corporate Governance Financial Statements72
EUROWAG Annual Report and Accounts 2023
TCFD continued
Scenario 1: A better world (1.5°C) continued
Category Type Description Timeframe
Risk evaluation
Management approach Impact description
Impact on
EBITDA Likelihood
Gross
risk rating
Transition risks and opportunities continued
Policy and
legal
Higher price of fossil fuels increasing
financial instability and indebtedness of our
customers (e.g. SMEs more at risk).
Higher expense and
credit risk.
H
We provide support, including tools and technology, to our
customers, facilitating their transition to low-carbon
economies. We do this by focusing on improving efficiency
with technology and giving customers access to alternative
fuels.
Policy and
legal/
reputation
Inability to keep the pace with rapid shift in
regulation and policy requirement, thus not
meeting investors’ expectations.
Decline in share
prices and
reputational damage.
No impact.
L
N/A Our current approach is to first track trends and build
knowledge and capability internally to ensure our internal
processes are adapted and robust. We also focus on
increasing investment to comply with regulation and meet
stakeholders’ expectations.
Reputation
Increased climate awareness means people
will want to work in a value driven business.
Challenges with
talent retention and
attraction.
M
Continue to ensure we have a clear employee value
proposition, including a clear message on how all
employees can contribute and be part of the solution. In
2024, we will also re-engage employees with a purpose
through a series of workshops, raising awareness of what
it means to be a purpose driven business.
Technology
Incorporate energy transition into the
business model ensuring we are part of the
solution, offering new tools and technologies
to our customers.
Increased revenue.
M
N/A Continuing to grow our ambition and working to support
the transition to cleaner mobility in the CRT sector are key
to this.
Market
The successful electrification of CRT will in
turn lead to more accessible prices for electric
commercial vehicles in the future.
Increased revenue
and market share for
electric commercial
vehicles.
Estimates
will be
included
next year as/
when more
detailed
information
becomes
available.
M
No data. Continuously review opportunities to be part of the eMobility
ecosystem for commercial vehicles. Monetise early investment
in eMobility expertise, technology and acquisitions (“ROI”).
Key
Timeframe
Short Medium Long
Gross risk rating
High CriticalMediumLow
Likelihood
HighMedium Low
L M H
Type
Risk Opportunity
Strategic Report Corporate Governance Financial Statements 73
EUROWAG Annual Report and Accounts 2023
Scenario 2: Uncertain and volatile world (2°C)
Category Type Description Timeframe
Risk evaluation
Management approach Impact description
Impact on
EBITDA Likelihood
Gross
risk rating
Physical risk
Acute
Extreme weather events such as sea level rise,
flooding, fires or droughts compromising the
usability of routes, thus leading to business
disruption, for example, the closure of petrol
stations.
Inability of the
Group to operate
during those events.
L
Conduct regular reviews of our business continuity plans
to factor in potential impacts of extreme weather events.
Chronic
Increased droughts in Southern Europe and
increased flooding events in Northern Europe
leading to shortage of supply and potential
assets becoming inoperable (e.g. dried out
petrol stations).
Disruption to
operations.
L
Conduct regular assessment of climate risks associated
with our current physical portfolio and supply to ensure we
monitor the physical climate-related risks.
Transition risks
Policy and
legal/
market
Eurowag’s current transition plan not at a fast
enough pace to follow the shift in regulation
and policy accelerating the phase-out of
fossil fuels in Europe.
Decline in revenue
from fossil fuels and
increased opex.
H
We continuously monitor the pace of change and aim to
be a key leader in the transition for the CRT sector.
Market
Customer viability due to increased price of
fossil fuels.
Higher expense and
credit risk.
M
Provide mobility and payment solutions, and related tools
and advisory services to support customers in their
transition to low-carbon economies.
Policy and
legal/
reputation
Inability to keep the pace with rapid shift in
regulation and policy requirement, thus not
meeting investors’ expectations.
Decline in share
prices and
reputational damage.
No impact.
L
N/A Increase investment to comply with regulation and meet
stakeholders’ expectations.
Key
Timeframe
Short Medium Long
Gross risk rating
High CriticalMediumLow
Likelihood
HighMedium Low
L M H
Type
Risk Opportunity
Strategic Report Corporate Governance Financial Statements74
EUROWAG Annual Report and Accounts 2023
TCFD continued
Scenario 2: Uncertain and volatile world (2°C) continued
Category Type Description Timeframe
Risk evaluation
Management approach Impact description
Impact on
EBITDA Likelihood
Gross
risk rating
Transition risks continued
Policy and
legal
The establishment of policies is disjointed
with individual countries in Europe taking
different approaches, with new policies and
legislation on GHG emissions, electric
vehicles, pollution, taxes and levies. All of this
leads to a complex and challenging system
of compliance, increasing the challenges of
operating in the region.
Disruption to
operations. Increase
in costs for the Group
and its customers.
H
Continue ongoing, constructive engagement, and advocacy
with policy makers to promote a unified and consistent
approach to public policy measures. This includes active
participation within trade bodies as well as with other
like-minded stakeholders in the CRT sector.
Market
With our commitment to support the CRT
move to a low-carbon economy, Eurowag has
the opportunity to lead that transition, in turn
increasing our attractiveness compared with
our peers.
Increase reputational
gain and market
share.
Estimates will
be included
next year as/
when more
detailed
information
becomes
available.
M
No data. Invest in new tools and technologies, support our consumers
and work in partnership to facilitate that transition. We also
adopt a data centric approach, collecting data from our
mobility solutions. In the future, there will be opportunities to
share carbon data with customers.
Scenario 3: An irreversible world (3°C)
Category Type Description Timeframe
Risk evaluation
Management approach Impact description
Impact on
EBITDA Likelihood
Gross
risk rating
Physical risk
Acute
Increase in frequency and intensity of
flooding events, higher temperatures, and
other extreme weather events.
Temporary closure
and/or disruption of
key assets. Disruption
of our supply chain.
Impact on employees’
health and ability to
travel to work.
Damages to
infrastructure.
Disruption to
operations.
H
Periodically review business continuity plans to ensure
risks are factored into planning in the short and medium
term. This includes utilisation of climate tools to assess
risk on assets and supply chain.
Key
Timeframe
Short Medium Long
Gross risk rating
High CriticalMediumLow
Likelihood
HighMedium Low
L M H
Type
Risk Opportunity
Strategic Report Corporate Governance Financial Statements 75
EUROWAG Annual Report and Accounts 2023
Scenario 3: An irreversible world (3°C) continued
Category Type Description Timeframe
Risk evaluation
Management approach Impact description
Impact on
EBITDA Likelihood
Gross
risk rating
Physical risk continued
Chronic
Extreme weather events and sea level rise
would lead to high investment required to
keep vulnerable assets operational. This can
include wind, flooding and drought.
Higher capital
investment. Write-off
of assets.
Disruption to
operations.
M
Conduct regular assessment of climate risks associated
with our current physical portfolio and supply to ensure
we monitor the physical climate-related risks.
Chronic
Extreme weather could lead to social unrest
and migration of upwards of millions of
people to Western and Northern Europe.
Migration of
employees.
Challenges with
talent retention and
attraction.
H
Regular review and assessment of strategic and people
agenda. Eurowag will continue to ensure we have a clear
employee value proposition and a clear message on how
all employees can contribute and be part of the solution.
Employee support and business agility will also be key.
Transition risks
Market
Competitive disadvantage if no ROI in
low-carbon solutions due to a slow transition,
with economic growth still powered by fossil
fuels.
We will see no
positive return from
our current business
model to transition if
the transition has
been slow.
L
Monitor external developments, stay agile, and adapt our
business model if need be.
Policy and
legal
Social and political shift. Ideological and
political perspectives change. Risk that the
world becomes more polarised and irrational
policy decisions are taken.
Disruption to
operations.
H
Monitor external developments and ensure that the
business is equipped to meet changing regulatory
requirements.
Technology
Increased criminal activities and cyber-crime
impacting platforms and technology sector.
Loss of revenue and
opex.
M
Strengthen cyber security in all our platforms and manage
the risk as well as building internal capability with a
centralised dedicated role for IT security.
Key
Timeframe
Short Medium Long
Gross risk rating
High CriticalMediumLow
Likelihood
HighMedium Low
L M H
Type
Risk Opportunity
Strategic Report Corporate Governance Financial Statements76
EUROWAG Annual Report and Accounts 2023
Non-financial and sustainability information statement
The table below constitutes the Eurowag Non-Financial and Sustainability Statement, produced
in compliance with the non-financial reporting requirements set out in Sections 414CA and
414CB of the Companies Act 2006. Information relating to each section of the non-financial
reporting requirements have been incorporated via cross-reference.
Reporting
requirement Policies and standards
Additional information related
to our policies and standards
Climate-
related
financial
disclosures
@
TCFD disclosures Climate risk and TCFD statement, page 65
ESG governance framework, page 53
Environmental
matters
@
ESG strategy
@
ESG Policy
Sustainability strategy, page 52
ESG governance framework, page 53
TCFD statement, page 65
Main activities undertaken during the
financial year, page 85
Employees
@
Eurowag values
@
Code of Conduct
@
@
Health and safety Policy
@
Grievance Policy
@
Anti-harassment and anti-bullying
Policy
S172 statement, page 28
Main activities undertaken during the
financial year, page 85
Engagement with the workforce, page 29
Developing our culture, page 87
DEI, page 62
Social matters
@
Modern slavery and human
trafficking Policy
Sustainability, page 51
DEI, page 62
Reporting
requirement Policies and standards
Additional information related
to our policies and standards
Human rights
@
Modern slavery and human
trafficking Policy
@
Anti-bullying and anti-harassment
Policy
@
Personal data protection Policy
@
Personal data directive
Responsible business practices, page 63
Anti-
corruption
and anti-
bribery
matters
@
Anti-bribery and corruption Policy
@
AML Policy
@
System of internal principles
@
Partner screening directive
@
Conflicts of interest Policy
@
Market abuse regulation
procedures manual
@
Related parties transactions Policy
@
Significant transactions policy
Responsible business practices, page 63
Principal risks
relating to
requirements
@
n/a Risk management, page 39
Business
model
@
n/a Business model, page 18
Non-financial
KPIs
@
n/a Key Performance Indicators, page 25
This Strategic report was approved by
and signed by order of the Board by:
Non-financial and sustainability
information statement
For and on behalf of Computershare
Company Secretarial Services Limited
25 March 2024
78 Chairman’s introduction to governance
80 Board of Directors
84 Corporate governance report
93 Nomination and Governance Committee report
97 Audit and Risk Committee report
106 Remuneration report
125 Directors’ report
Strategic Report Corporate Governance Financial Statements
EUROWAG Annual Report and Accounts 2023
77
Corporate
governance
Strategic Report Corporate Governance Financial Statements78
EUROWAG Annual Report and Accounts 2023
Letter from the Chairman
Chairman’s introduction to governance
Dear shareholders,
I am delighted to present our 2023
Governance Report, which provides insight
into how we, the Board, have approached our
responsibilities during the year. In our second
full year since listing on the London Stock
Exchange and forming our Board, I have been
pleased with the continuous improvements
made to the Board and its operation, as we
strive to be effective and entrepreneurial in
the discharge of our duties. Robust corporate
governance practices remain a core priority,
with our responsibilities under the 2018 UK
Corporate Governance Code (the “Code”)
and those owed to our stakeholders kept
central to our approach to decision making.
For more details on how the Board has
implemented the Code, please see page 84.
Our Board continues to consider the views
of our key stakeholders throughout its
decision making. Further details can be
found in our Engaging with our stakeholders
section on pages 28 to 31, including the
considerations the Board gave as part of its
decision-making process.
Changes to our Board
During the year, we said goodbye to
Financial Officer of the Company since
September 2019, and also Caroline Brown,
who had served as an Independent Non-
Executive Director and Chair of the Audit and
Risk Committee since our IPO. In February
2024, we announced that Susan Hooper would
depart as an Independent Non-Executive
Director and Environmental, Social and
May 2024.
Magdalena, Caroline and Susan have each
played a key role in the delivery of our
strategic aims. On behalf of the Board and the
rest of the Eurowag team, I would like to thank
them for their endeavours and service.
Following rigorous selection processes, we
welcomed Oskar Zahn as Chief Financial
Officer in May 2023, Steve Dryden as an
Independent Non-Executive Director and Chair
of the Audit and Risk Committee in June 2023,
and Sophie Krishnan and Kevin Li Ying as
Independent Non-Executive Directors in
March 2024. These appointments bring
additional skills and experience, particularly in
the areas of financial reporting and technology
products, that have strengthened our Board to
deliver on its ambition to create a clean, fair
and efficient commercial road transport
(“CRT”) industry. We will seek to ensure
continuous improvement in the composition of
the Board through annual reviews in order that
we have sufficient capabilities to meet our
responsibilities and maximise our capacity to
deliver value to our stakeholders.
Commitment to diversity
As part of the Board’s ongoing reviews,
diversity is a key consideration, and we remain
committed to our targets on gender diversity.
We also consider diversity of ethnicity, culture,
and cognitive and personal strengths. The
Board believes that we should be
representative of our stakeholders, including
our people, our shareholders, and the markets
in which we operate.
In 2023, the Directors reviewed and reaffirmed
their commitment to the Diversity and Inclusion
Policy, which aspires to commit to no fewer than
50% of women on the Board and at least one
Director from an ethnic minority, and represent a
blend of nationalities to reflect the international
nature of the Company, with the aim to
accomplish this as a medium-term objective.
During the year, the percentage of women
serving on the Board dropped from 62.5% to
37.5% following the departures of Magdalena
focused our Board recruitment process on
attracting a wide range of candidates,
ultimately, we selected the appropriate
individuals regardless of gender or ethnicity.
Obviously, this sets us a challenge now and for
the future, as we are committed to achieving
and maintaining the balance identified in the
FTSE Women Leaders Review, Parker Review
and requirement under the Financial Conduct
Despite this, we continue our progress to
increase representation of female and other
under-represented groups in Senior Leadership
Team roles in-line with regulations and
governance best practice. Our ambition and
commitment to promote diversity within our
business is core to our recruitment strategy.
Further information on our Board’s composition
and diversity can be found on page 88 in the
Corporate governance report and page 95 of the
Nomination and Governance Committee report.
Strategic Report Corporate Governance Financial Statements 79
EUROWAG Annual Report and Accounts 2023
Board effectiveness
In-line with the Code, the Company performed
its first externally facilitated evaluation of the
Board of Directors and its Committees during
the year. Lintstock Limited (“Lintstock”), a
London-based advisory firm specialising in
Board performance evaluations, which is
independent of the Company, was engaged to
undertake the evaluation.
The Board discussed a high level review of the
key points of the evaluation in early 2024, noting
that many of the recommendations of the
review had already been implemented. Further
sessions are planned with the Nomination and
Governance Committee to address the
remaining proposals in the evaluation.
I would invite you to read more on our 2023
evaluation and the action plan on page 96
in the Nomination and Governance
Committee report.
Engagement with our workforce
Our Board understands the critical role that our
people have in the delivery of our purpose and
growth strategy, and they have the thanks of our
Board for their hard work through uncertainty
and challenges during 2023. I was pleased that
I, along with my colleagues, was able to meet
with some of our employees during our visit to
Prague in July 2023, where the Board was
satisfied to see the consistency between Board
reporting and operational delivery, through
meetings with non-management employees.
Sharon Baylay-Bell acts as the Board’s
representative to the workforce and provided
the Board with regular updates on the outcomes
of engagement activities. These included visits
to operating sites in the Czech Republic,
Portugal and Spain, where she was supported
by the Chief Human Resources Officer. Further
details about our workforce engagement
practices can be found on page 29.
In-line with best practice, our Board reviewed
September 2023, which allows employees a
simple and effective channel to raise concerns
and grievances. I am confident the new
procedure will give comfort to employees that
their concerns are taken seriously by our Board
and Executive Committee. Further details
and procedures can be found on page 105.
Engagement with
our shareholders
The support of our shareholders has been
integral to the Company’s achievements during
2023. I would like to thank our shareholders
again for the continued support they gave to
the Company, especially during the Class I
acquisition of Grupa Inelo S.A. (“Inelo”), at a
General Meeting held on 9 March 2023. I had
the opportunity to meet some of our
cornerstone investors during one-on-one
meetings in April 2023. The meetings provided
insights on our shareholders’ perception of our
strategy and progress. During the year, our
Executive Directors, supported by our brokers,
undertook investor roadshows in Europe and in
North America, and met with existing and
prospective shareholders. At our Capital
Markets Day, our shareholders were provided
a deeper understanding of the Company’s
purpose, strategy and plans for future growth,
and my fellow Directors and I were able to
meet and converse with our shareholders.
Our Board will continue our engagement
activities with our shareholders, and I look
forward to meeting with our shareholders
again at our next Annual General Meeting
(“AGM”) which is scheduled to be held at our
Albemarle House, 1 Albemarle Street, London
W1S 4HA, on 16 May 2024 at 4pm GMT.
Commitment to climate
Our Board remains committed to the Company’s
purpose, to help the CRT industry to become
clean, fair and efficient. That purpose is
supported by the Company’s ambitions towards
becoming a net zero business. During the year,
our Board monitored progress against the
Company’s climate-related key performance
indicators (“KPIs”), sustainability and net zero
transition plans and will continue to challenge
the Senior Leadership Team to go further in its
endeavours to create a cleaner industry. In
addition, our Board received training on the
impact of climate change on our business and
reviewed the management action plans to
reduce and mitigate those risks.
Conclusion
I would like to thank my colleagues on the
Board for their commitment and constructive
challenge throughout the year. As our
Company continues to face uncertain
macroeconomic conditions and the impacts
of a high inflation and high interest environment,
I am encouraged by the Board’s capacity to
support the Company to achieve its growth
strategy in the coming year and beyond.
PaulManduca
Chairman
We strive to be effective and
entrepreneurial in the discharge
of our duties.“
PaulManduca
Chairman
Strategic Report Corporate Governance Financial Statements80
EUROWAG Annual Report and Accounts 2023
Our Board of Directors
Board of Directors
The Directors of the Company who were in office during the year and up to the date of signing the financial statements were:
Paul Manduca
Chairman of the Board
Sharon Baylay-Bell
Independent Non-Executive Director
Oskar Zahn
Chief Financial Officer
Steve Dryden
Independent Non-Executive Director
Martin Vohánka
Chief Executive Officer
Susan Hooper*
Independent Non-Executive Director
Mirjana Blume
Senior Independent
Non-Executive Director
Sophie Krishnan
Independent Non-Executive Director
Joseph Morgan Seigler
Non-Executive Director
Kevin Li Ying
Independent Non-Executive Director
N
NRA
RA
RA
NRANRANRA
R
Remuneration CommitteeChair
N
Nomination and Governance Committee
A
Audit and Risk Committee
* Susan is stepping down from the Board at the 2024 AGM.
Strategic Report Corporate Governance Financial Statements 81
EUROWAG Annual Report and Accounts 2023
Paul Manduca
Chairman of the Board
Appointed
7 September 2021
Nationality
British/Maltese
Other commitments
Chairman of St James’s Place plc
Skills and experience
Paul has over 40 years’ experience in executive and non-executive
roles in the financial and business services sectors. From 2012
to 2020, Paul was Chairman of Prudential plc, having previously
been appointed to the board as Senior Independent Director in
2010. Other prominent positions include roles as Senior
Independent Director of WM Morrison Supermarkets plc from
2005 to 2011, during which he served as Chairman of the Audit
Committee and the Remuneration Committee. Prior to this, he
was appointed global Chief Executive Officer of Rothschild
Asset Management in 1999 and European Chief Executive
Officer of Deutsche Asset Management from 2002 to 2005.
Earlier in his career, Paul served as Chairman of the Association
of Investment Companies, as Chairman of The City UK’s
Leadership Council, and as founding CEO of Threadneedle
Asset Management Limited. Paul had also previously served as
Chairman of Templeton Emerging Markets Investment Trust plc
and stepped down from this role on 1 January 2024.
Other previous appointments include Chairman of Aon UK
Limited from 2008 to 2012, having served as a Non-Executive
Director since 2006, JPM European Smaller Companies
Investment Trust plc and Bridgewell Group plc, and Director
of Henderson Smaller Companies Investment Trust plc, Eagle
Star Insurance Company and Allied Dunbar.
Paul holds an MA in Modern Languages from the University
of Oxford, where he is also an Honorary Fellow of Hertford
College. In 2018, Paul was awarded a Maltese Order of Merit.
Martin Vohánka
Chief Executive Officer
Appointed
3 August 2021
Nationality
Czech
Other commitments
Together Foundation)
Director of Couverina Business s.r.o
Skills and experience
Martin founded Eurowag Group in 1995, shortly after graduating
from high school. Over the years, Martin has successfully
developed and scaled the business from an energy payments
solution to an integrated payments and mobility platform for the
CRT industry, which includes toll payments, on-board
telematics, route optimisation and much more.
Martin is devoted to providing every CRT company with the
benefits of digitalisation at scale. He has grown up with these
businesses, spending time in their vehicles and with the
families that own and operate them, to understand what they
need in order to improve efficiencies. His vision is to build a
seamless integrated digital ecosystem to revolutionise what
is known as the middle mile, to benefit customers, partners
and the environment.
Martin holds an MBA from the University of Pittsburgh and
lectures at the University of Economics, Prague.
Oskar Zahn
Chief Financial Officer
Appointed
12 May 2023
Nationality
British/South African
Other commitments
N/A
Skills and experience
Oskar joined Eurowag and the Executive Team as Chief
Oskar brings with him over 30 years’ experience of working
within large complex international businesses with continuous
improvement and growth focused cultures.
Most recently, he was CFO at XP Power Limited, one of the
world’s leading providers of power converter solutions. Prior to
XP Power, Oskar was CFO of Scapa Group plc, a leading global
manufacturer to the healthcare and industrial markets, from
2018 until its acquisition by SWM International, Inc., in early
2021. Previously, Oskar was CFO at Spearhead International,
a leading vertically integrated food and agriculture business
operating in CEE and the UK. Oskar has held other senior roles
in Teleflex, British Airways, Georgia-Pacific and KPMG. He has
an honours degree in Finance from the University of South
Africa and is a fellow of the Institute of Chartered Accountants
in England and Wales and of the Institute of Chartered
Accountants of South Africa.
Strategic Report Corporate Governance Financial Statements82
EUROWAG Annual Report and Accounts 2023
Board of Directors continued
Mirjana Blume
Senior Independent Non-Executive Director
Appointed
7 September 2021
Nationality
Swiss/Croatian
Other commitments
Chief Financial Officer of Synhelion Ltd
Member of the Board of Directors, the Audit Committee and
the Digital Committee of Orell Fuessli Ltd, a SIX Swiss
Exchange-listed company
Vice Chairwoman of the Board of Directors and Chairwoman
of the Audit Committee of IWB, Industrielle Werke Basel
Chairwoman of the Board of Directors of EWE, Energie und
Wasser Erlenbach Ltd
Member of the Board of Directors of WAZ, Werke am Zürichsee Ltd
Member of the Board of Directors of Freigeist Asset
Management Ltd
Secretary of the Board of Directors of Qnective Ltd
Skills and experience
Mirjana has more than 25 years’ experience in the areas of
corporate finance, structuring of companies and management
of complex corporate transactions. She was appointed to the
Eurowag Supervisory Board in December 2020 to provide
vision and expertise to guide Eurowag on its mission to become
the leading on-road mobility platform.
Mirjana holds the position of Chief Financial Officer at
Synhelion Ltd and, earlier in her career, was Chief Executive
and Financial Officer of various companies in the energy,
technology and healthcare sector.
Mirjana holds a bachelor’s degree from the Zurich University of
Applied Sciences and an MBA from the University of St Gallen.
Sharon Baylay-Bell
Independent Non-Executive Director
Appointed
7 September 2021
Nationality
British
Other commitments
Chair and independent technology consultant of DriveWorks Ltd
Skills and experience
Sharon has had a successful career in technology, media,
and digital companies, and has extensive corporate
governance experience. She is the designated Director for
employee engagement within the Group.
Sharon is a former Non-Executive Director of Ted Baker plc and
served as acting Chair from December 2019 to July 2020. She
has previously held roles as Marketing Director and main Board
Director of the BBC, and spent 16 years at Microsoft, where she
was a Board Director of Microsoft UK and Regional General
Manager of MSN International.
Sharon holds a graduate Diploma in Marketing from the
Chartered Institute of Marketing and is a Fellow of the
Chartered Institute of Marketing, as well as a Member of Women
in Advertising and Communications Leadership.
Susan Hooper
Independent Non-Executive Director
Appointed
7 September 2021
Nationality
British/American
Other commitments
Independent Non-Executive Director and Chair of the
Remuneration Committee, ESG Lead and Designated
Representative for Workforce Engagement of Moonpig Group plc
Independent Non-Executive Director of Uber UK
Chair of the Board of Tangle Teezer Limited
Founding Director of ChapterZero
Ambassador for the World Travel & Tourism Council
Skills and experience
Susan has extensive experience within a broad range of large
consumer-facing businesses, both in executive and non-
executive roles.
These include: a Non-Executive Director of Wizz Air plc, a
Non-Executive Director of The Rank Group plc, where she was
Chair of the ESG and Safer Gambling Committee, and a
Non-Executive Director of Affinity Water, where she was Chair
of the Remuneration Committee. She was also a Non-Executive
Director for the Department for Exiting the European Union.
Prior to this, she was Managing Director of British Gas
Residential Services and Chief Executive of Acromas Group’s
senior roles at Royal Caribbean International, Avis Europe,
PepsiCo International, McKinsey & Co, and Saatchi & Saatchi.
Susan holds a bachelor’s and a master’s degree in International
Politics and Economics from the Johns Hopkins University
and the Johns Hopkins University School of Advanced
International Studies.
Strategic Report Corporate Governance Financial Statements 83
EUROWAG Annual Report and Accounts 2023
Steve Dryden
Independent Non-Executive Director
Appointed
1 June 2023
Nationality
British
Other commitments
CEO of Flint Group Holdings SARL
Skills and experience
Steve is a highly regarded and experienced business leader
who brings significant financial and audit leadership experience
and business acumen to the Board. Most recently, Steve serves
as Chief Executive Officer of Flint Group Holdings SARL.
Previously, he held the positions of CFO of Flint Group, Group
Finance Director of DS Smith plc and Group Finance Director
of Filtrona plc. Steve achieved his professional accountancy
qualification with PricewaterhouseCoopers and holds a degree
in Chemical Engineering from the University of Leeds.
Sophie Krishnan
Independent Non-Executive Director
Appointed
1 March 2024
Nationality
British/French
Other commitments
CEO of Lokalise, Inc
Non-Executive Director of Simbio Holdings
Skills and experience
Sophie has extensive experience with digital businesses scaling
their operations internationally, many of which offer mobility or
payment solutions. She has held both executive and non-executive
roles. She has served as CEO at CarNext and as Chief Operating
Officer at Zepz (formally WorldRemit Ltd) and has been a senior
executive at Trainline, Ltd and Expedia, Inc. She was a
Non-Executive Director for Avanti Acquisition Corp. Earlier, she
was a consultant at Bain & Co and an investor at Investor AB.
Sophie holds a dual Master’s-Diploma degree from the London
School of Economics and EDHEC, and an MBA from Stanford
Graduate School of Business as an Arjay Miller Scholar.
Kevin Li Ying
Independent Non-Executive Director
Appointed
1 March 2024
Nationality
British/Mauritian
Other commitments
Executive Vice President of B2C Division, Future plc
Executive Director and Board Member of GoCompare.com Ltd
Skills and experience
Kevin has over 20 years of experience in technology and over
10 years of executive leadership experience. Kevin brings deep
expertise in building scalable technology platforms. As Chief
Technology & Product Officer at Future plc, Kevin has helped
transform the business from a traditional print publisher to a
global online leading media platform.
Over his career, Kevin has developed a strong understanding
of the commercial levers, technology architecture and product
services that drive value for both business and customers.
Kevin currently serves as Executive Vice President of B2C
Division, the largest division of Future plc. Kevin oversees all
B2C brands, editorial and revenue generation consisting of
subscriptions, commercial advertising, e-commerce and
newstrade revenue whilst ensuring technology and data
are central to the B2C offer. Kevin also serves as Executive
Director and Board Member of GoCompare.com Ltd, the price
comparison website for financial and non-financial products.
Joseph Morgan Seigler
Non-Executive Director
Appointed
7 September 2021
Nationality
American
Other commitments
Managing Director at TA Associates and Co-Head of its
European Technology Group
Member of the following boards as a representative of TA
Associates: The Access Group, Adcubum, Auction Technology
Group, Flashtalking, ITRS, Netrisk Group, Sovos, thinkproject
and Unit4
Skills and experience
Morgan has over 17 years of private equity experience and
has led investments in software, financial technology, online
and e-commerce, and semiconductor companies. He is deeply
involved in creating both organic growth and complementary
acquisitions for all his portfolio companies.
Prior to joining TA Associates in 2002, Morgan worked for
Morgan Stanley and Raymond James.
Morgan holds an MBA from the Stanford Graduate School
of Business and a bachelor’s degree in economics from
Yale University.
Other Directors of the Company who were
in office during the year were:
Officer of the Company on 30 April 2023.
Caroline Brown retired as an Independent Non-Executive
Director of the Company on 11 May 2023.
Strategic Report Corporate Governance Financial Statements84
EUROWAG Annual Report and Accounts 2023
Feb Mar Apr May Jul Sep Oct Dec
General Meeting Chairman - investor
meetings
AGM Strategy day
Board - employee
engagement
meetings
Training on human
rights
Capital Markets Day Training on climate
and climate risk
@
Announcement of
acquisition of Inelo, a
leading fleet
management solutions
and work time
management provider in
Poland and Slovenia
@
Announcement of
appointment of Oskar
Zahn as the Chief
Financial Officer
@
2023 budget
@
2023 preliminary results
and Annual Report
@
Announcement of
appointment of Steve
Dryden as an
Independent
Non-Executive Director
@
Notice of AGM
@
2023 half-year interim
results
@
Refresh of Group risk
appetite and risk
management framework
@
2024 budget
@
HR initiatives
@
M&A integration plans
@
Group Compliance
Policy
@
Code of Conduct for
Suppliers Policy
@
M&A funding structures
@
M&A integration plans
@
Human Rights and
Anti-Trafficking
Statement
@
Group structure plan
@
M&A integration plans
@
Effectiveness of the
External Auditors
@
ESG strategy
@
Stakeholder
engagement strategy
@
M&A performance
@
Broker presentation and
market update
@
UK tax strategy
@
Speak Up
@
M&A review
@
Effectiveness of internal
controls
@
Workforce engagement
and diversity
@
Valuation Policy
@
Board Diversity and
Inclusion Policy
Corporate governance report
Governance overview
Statement of compliance with the 2018 UK Corporate Governance Code
W.A.G payment solutions plc (the “Company”) continues to adopt the Code. Throughout the year ended 31 December 2023, the Company has been fully compliant with the provisions of the Code.
Further information on the Company’s application of the principles and provisions of the Code can be found in the Corporate governance report on pages 85 to 93. The Code is publicly available at
https://www.frc.org.uk/.
Board’s agenda and major decisions during 2023
Indicates major decision
Strategic Report Corporate Governance Financial Statements 85
EUROWAG Annual Report and Accounts 2023
Board activities during 2023
Topic Key activities and discussions Key achievements Key priorities for 2024
Strategy and
management
@
Review of M&A funding structure and performance
against action plans
@
Continued investment in organic and inorganic
growth opportunities
@
Further technological transformation in our
product offerings
@
Board strategy day held in July 2023
@
Further M&A activity and achieving progress
against objectives
@
Completion of the acquisition of Inelo
@
Further investment into future product offerings
@
Signed additional facilities agreements to refinance
and expand the Group’s existing credit facilities
@
Integration of acquired businesses
@
Execution of transformational activities
@
Further development of future product
@
Delivery of organic and inorganic growth
@
Focus on culture and employee satisfaction
Stakeholder
engagement
@
Discussion on stakeholder engagement strategies
@
Investor relations meetings
@
Discussion of increasing engagement with staff at
newly acquired M&A companies
@
Chairman met with investors through
one-to-one meetings
@
Hosted first Capital Markets Day
@
Workforce engagement sessions with non-
management level staff
@
Continue to engage with employees and customers
to improve the Net Promoter Score (“NPS”) and
employee Net Promoter Score (“eNPS”)
Risk management
and internal controls
@
Review of the Company’s principal risks
and uncertainties
@
Reviewing and setting the Group risk appetite
@
Reviewing the effectiveness of the Group risk
management framework and internal control system
@
Review of the Company’s risk register
@
Reviewing the Group compliance action plan
@
Review and approval of the internal audit plan
@
@
Implementation of new internal audits on IT security
@
Cyber security discussions
@
Audit and Risk Committee received updates from
Business Assurance Committee
@
Monitor the effectiveness of the Group’s risk
management framework and internal control
environment and support its continual enhancement
Strategic Report Corporate Governance Financial Statements86
EUROWAG Annual Report and Accounts 2023
Corporate governance report continued
Topic Key activities and discussions Key achievements Key priorities for 2024
Financial reporting
and controls
@
Review of the external audit workplan
@
Finalising the Company’s commitment, targets
and implementation of KPIs
@
Review of the performance of External Auditors
@
Re-appointment of the External Auditors
@
Review of the interim consolidated financial
statements for the six months ended 30 June 2023
@
Review of the full-year consolidated
financial statements
@
Reviewed the effectiveness of internal controls
relating to financial reporting
@
Updated UK tax strategy
@
Monitor the implementation of an enterprise resource
planning system to support financial reporting
@
Support enhancements to the financial reporting
capabilities and controls over financial reporting
ESG
@
Discussion of the Company’s purpose, values
and culture
@
Review of sustainability action plan
@
Discussion of ESG targets
@
Reaffirmed commitment to the ESG strategy
and commitments
@
Monitor the implementation and outcomes of the
ESG strategy
@
Promote the Company’s purpose, values and culture
through the Group and its value chain
Board composition
and effectiveness
@
Review of the Board’s composition
@
Review of Board succession planning and
time commitments
@
Review of Senior Leadership Team succession
planning and time commitments
@
Discussion on Board diversity
@
Nomination of new Chief Financial Officer
@
Nomination of new Independent
Non-Executive Director
@
External Board performance review undertaken
@
Annual review of the Board Diversity and
Inclusion Policy
@
Monitor the implementation of recommendations
from the externally facilitated Board evaluation
@
Continue to strengthen the Board and its operations
Strategic Report Corporate Governance Financial Statements 87
EUROWAG Annual Report and Accounts 2023
Developing our people and culture
Defining our purpose, values and culture
Our success as a leading pan-European integrated payments and mobility platform continues
to be driven by the Company’s purpose, values and culture, as established by the Board of
Directors. The Board has ultimate responsibility for establishing the Group’s purpose, values and
culture. The Board, with support from the Senior Leadership Team, is committed to its purpose to
help the CRT industry to become clean, fair and efficient, and supports Eurowag operating under
the following four values, which encourage its employees to act as good corporate citizens:
@
Deliver your best
@
Embrace change
@
Be a true colleague
@
Be a good person
Furthermore, the Board has committed to the journey to a greener future, as Eurowag is striving
to reach net zero emissions by 2050 through a combination of short and longer-term
decarbonisation targets covering operations within the Group and in our value chain.
Aligning purpose, values, strategy and culture
We ensure that our purpose, values and culture are aligned with our long-term strategy, as
we recognise that strong performance is driven by shared understanding. Our four core values
provide a foundation that motivates and guides our people, and these principles are embedded
in every action we take as an organisation in order to reach our shared purpose. Our values
inspire us to achieve success and happiness in our work and private lives.
Our strategy is the roadmap to achieving our shared goals and underlying purpose, which is
to promote fairness, increase efficiency and act as climate conscious leaders within the CRT
industry. We have embedded our shared purpose and values as part of our shared organisational
culture through the creation of policies to create clear standards that align our people.
Our people are our greatest asset, and therefore we ensure our people exemplify what we stand for.
Alignment with our values is a criterion considered in recruitment, promotion and when establishing
rewards. This is how we promote and safeguard the culture we have nurtured, which has allowed
Eurowag to continue to perform and successfully execute its strategy each financial year.
Engagement with our employees
The Board has, in conjunction with the Senior Leadership Team, built an entrepreneurial
environment that promotes collaboration and development of its employees. The Group
demonstrates its recognition of the value of its workforce through creating channels for
collaboration and continual feedback, which can be evidenced by the Group’s high levels
of employee engagement.
Sharon Baylay-Bell continued as the Board’s appointed Non-Executive workforce engagement
Board representative, with designation to represent in matters of workforce engagement. During
the year, the Board directly engaged with the employees at all levels of the organisation, in order
to satisfy themselves that Board level reporting was consistent with operational delivery. This
activity created an effective feedback loop between the Board and the wider workforce, and
further contributed to the creation of positive working relationships across the Group.
The Board regularly reviews the action it has taken to engage with the wider workforce to ensure
Policy which was updated and approved by the Board in September 2023.
The Board receives regular reports from the Senior Leadership Team on specific areas of Group
employee engagement activities to ensure the Board has a thorough understanding of the
business and its employees.
Further information on workforce engagement can be found on page 29.
We promote and safeguard the culture we have nurtured,
which has allowed Eurowag to continue to perform.“
PaulManduca
Chairman
Strategic Report Corporate Governance Financial Statements88
EUROWAG Annual Report and Accounts 2023
Corporate governance report continued
Division of responsibilities
Decisions and matters reserved for the Board
The formal schedule of matters reserved for the Board and the Terms of Reference for each of the
Board Committees are reviewed annually to ensure their accuracy in-line with governance best
practice. The Board also operates in-line with a delegated authority matrix, which provides the
division of responsibilities regarding decision making. The formal schedule of matters reserved for
the Board can be found on the Company’s website and provides guidance on the following areas:
Strategy and management
The Board has ultimate responsibility for the management, oversight and success of Group
operations. Responsibilities of the Board include:
@
Ensuring competent, prudent and effective management
@
Forward planning to meet the Company’s short-term and long-term strategic goals
@
Implementing and monitoring the internal control framework on an ongoing basis
@
Overseeing the maintenance of accurate accounting records and other records
@
Ensuring compliance with statutory and regulatory obligations
The Group’s strategic goals and wider business plan are regularly discussed and reviewed by
the Board, to ensure these are aligned with actual performance. The Board further establishes
the Company’s purpose and values to drive long-term objectives and commercial strategy.
The Board is responsible for considering and approving any new ventures with external
businesses or in different geographic areas, for deciding to discontinue operations in any area
of the Group’s business, and for the restructuring or reorganisation of the Group.
Board composition and effectiveness
In-line with the requirements of the Code, the Board is committed to undertake an annual
evaluation of its own performance, as well as the performance of its Committees and individual
Directors. During 2023, the annual Board evaluation was facilitated by an external provider,
Lintstock, in-line with the Code and corporate governance best practice.
Throughout the evaluation, Board diversity, independence, time commitment, and the suitability
of the mix of skills, experience and knowledge across the Directors are examined. Details of the
Board evaluation undertaken for the year ended 31 December 2023 can be found in the
Nomination and Governance Committee report on page 96.
Both the composition of the Board and succession planning are regularly considered by the
Nomination and Governance Committee, and Eurowag is committed to ensuring a diverse
pipeline for executive management and Board roles. Going beyond the requirements of the FCA
Listing Rules, the Board’s Diversity and Inclusion Policy established the aspirational objectives to
promote diversity in the Board and Senior Leadership Team.
Diversity of the Board as of 31 December 2023
Gender
Age
As at 31 December 2023, the Board comprised three female Independent Non-Executive
Directors, two male Independent Non-Executive Directors, one male Non-Executive Director,
and two male Executive Directors. Six of the Directors have served on the Board for less than
four years and two of the Directors have served on the Board for less than one year.
As at 31 December 2023, the Company was not fully compliant with the diversity requirement of
the FCA Listing Rules. The Board comprised 37.5% female members, having been 60% at
Brown from the Board and appointments of Oskar Zahn and Steve Dryden. The Senior Independent
Director, being a senior Board position, is held by a female, Mirjana Blume. There was no Board
member from a minority ethnic background as defined by the Office of National Statistics.
The Company’s primary operations are in Central and Eastern Europe (“CEE”) and the Board aims
to be representative of the communities in which it operates. The Board has committed to meeting
the requirements of the FCA Listing Rules and its aspirations in its Diversity and Inclusion Policy on
Strategic Report Corporate Governance Financial Statements 89
EUROWAG Annual Report and Accounts 2023
female representation as a medium-term objective. The Board’s Diversity and Inclusion Policy refers
to the Board and, by extension, its Committees, which have not adopted separate policies and rely on
the policy approved by the Board.
On 7 February 2024, it was announced that Sophie Krishnan and Kevin Li Ying would be appointed
to the Company as Independent Non-Executive Directors, with effect from 1 March 2024, and
that Susan Hooper would resign as an Independent Non-Executive Director, with effect from
16 May 2024, following the AGM of members on that date. As at the date of publication of this
report, the Board comprised one member from a minority ethnic background, as defined by the
Office of National Statistics, and had 40% female representation. Following the resignation of
Susan Hooper on 16 May 2024, the female representation on the Board is expected to be 33%.
out in Listing Rule 9 Annex 2.1, as at 31 December 2023. The information presented in the below
tables was collected on a self-reporting basis by the Directors and by the Senior Leadership
Team, who were asked to confirm which of the categories specified in the prescribed tables
were most applicable to them.
Gender identity
Number
of Board
members % of the Board
Number of
senior positions
on the Board
Number in
executive
management
Leadership
Team)
Percentage of
executive
management
Committee
members)
Men 5 62.5% 3 7 87.5%
Women 3 37.5% 1 1 12.5%
Non-binary 0 0% 0 0 0%
Prefer not to say 0 0% 0 0 0%
Ethnic background
Number
of Board
members % of the Board
Number of
senior positions
on the Board
Number in
executive
management
Leadership
Team)
Percentage of
executive
management
Committee
members)
White British or other White
(including minority White groups) 8 100% 4 8 100%
Mixed/multiple ethnic groups 0 0% 0 0 0%
Asian/Asian British 0 0% 0 0 0%
Black/African/Caribbean
/Black British 0 0% 0 0 0%
Other ethnic group,
including Arab 0 0% 0 0 0%
Prefer not to say 0 0% 0 0 0%
Further details on the Board diversity can be found in the Nomination and Governance
Committee Report on page 95.
Remuneration
The Board has delegated responsibility to the Remuneration Committee for determining the
respective policies for the remuneration for Executive Directors, Non-Executive Directors, the
Chairman and the Senior Leadership Team. The Board maintains oversight over the actions of the
Remuneration Committee and is responsible for reviewing and approving the policies proposed
by the Remuneration Committee. The Board is responsible for considering and approving the
remuneration policy for the Board and Senior Leadership Team and determines the remuneration
of the Non-Executive Directors within the limits set in the Articles of Association (the “Articles”).
For further details of the Company’s approach to remuneration, see page 106.
Financial and annual reporting
The Board is responsible for approving the Group’s Annual Report and Accounts, the Interim
Accounts and Half-Yearly Report, and the preliminary announcement of the final results,
following recommendation from the Audit and Risk Committee. The Board has delegated
authority to the Disclosure Committee to approve regular trading updates.
Capital expenditure and financing
The Board is responsible for the approval and oversight of investments and capital projects in
the following circumstances:
@
Any proposed investments and capital projects exceeding £6 million in value
@
Any unbudgeted investments and capital projects exceeding £2 million
@
Any time the Group seeks to borrow in excess of £5 million
@
Any time the Group seeks to enter into any mortgage, charge (fixed or floating), pledge,
hypothecation or other encumbrance of a similar nature over all or any part of the undertaking,
property and assets (both present and future) and uncalled capital of the Company
@
Any member of the Group seeks to issue any debt instruments for amounts in excess
of £5 million, including bond issues, debenture issues and loan stock instruments
(but excluding intragroup debt instruments)
@
The Company seeks to enter into any indemnities or guarantees where the maximum amounts
payable could exceed £5 million, other than indemnities and guarantees given in respect of the
Group’s products, services or any banking facilities (including any in substitution for or renewal
of existing arrangements)
Strategic Report Corporate Governance Financial Statements90
EUROWAG Annual Report and Accounts 2023
Corporate governance report continued
Engagement with shareholders and wider stakeholder groups
The Board, together with the Senior Leadership Team, regularly reviews and promotes
engagement with our shareholders and wider stakeholder groups. The Board regularly reviews
engagement mechanisms and processes to ensure these are operating effectively, and receives
reports from the Senior Leadership Team, including the head of investor relations, capturing
feedback from shareholders. The Board uses shareholder feedback to contribute to our
engagement strategy, as developed by the Board, to approach issues that are most important to
the long-term success of the Group. The Chairman regularly engages with our shareholder base
to gain insight around their views on the current governance framework and Group performance
against our strategy.
In October 2023, the Company announced an update on the actions taken and the views
received from shareholders, following the voting outcome of Resolution 13 at the Company’s
2023 AGM, held on 11 May 2023. Resolution 13 was approved by shareholders but received less
than 80% in favour. The waiver of Rule 9 granted by Resolution 13 permits the Concert Party’s
interest in the Company’s shares to increase as a result of the implementation of the authority to
purchase the Company’s own shares without requiring the Concert Party to make a mandatory
offer for the other shareholders’ shares. The Directors do not think this presents an issue for the
Company and believe this resolution to be in the best interests of all shareholders. The Company
worked to positively engage shareholders, including dissenting shareholders, to help them
understand the need for the resolution and address their concerns.
The Company hosted its first Capital Markets Day in October 2023, during which financial
stakeholders had the opportunity to engage with various members of the Board and gain further
insight into the Group’s strategy and new product offerings being made available to the market.
Through the event, the Company received hugely positive and valuable feedback, and this forum
allowed stakeholders the opportunity to experience demonstrations of our new technology and
to raise questions. Further information on how we engage with our shareholders and wider
stakeholder groups can be found on page 28.
Environmental, social and governance
The Board ensures that the Group’s environmental, social and governance impacts, risks and
opportunities are reviewed on a regular basis. This has been achieved by the delegation of
accountability to the ESG Executive Committee, the membership of which is comprised of the VP
of Sustainability and Corporate Social Responsibility (“CSR”), the Chief Executive Officer, Martin
Leadership Team, including representatives from legal, human resources, communications,
commercial and investor relations. Independent Non-Executive Director, Susan Hooper joined
the Committee for the first two years of its operations, to lend additional expertise and
experience, whilst the Executive and leadership team built internal understanding and
established the building blocks for successful development and implementation of the
sustainability action plan. From 2024 onwards the ESG Executive Committee will run without
Board representation.
The ESG Executive Committee meets every quarter to set strategic direction and monitor
the progress of ESG strategy, related policies and reporting. These discussions allow for
recommendations to be made regarding the evolution and refinement of our ESG strategy,
with consideration for ESG risks and opportunities. We have set tangible targets to monitor our
progress in-line with these discussions, and we are aiming to achieve net zero emissions by
2050. The Board received regular updates on ESG matters from the Senior Leadership Team
and received training on climate and its impact on the Group. For further details of the
Company’s approach to Sustainability, see page 52 and the Company’s Sustainability report.
Risk management and internal controls
The Board has ultimate responsibility for risk management and the internal controls in place,
including the oversight and strengthening of the environment to ensure a comprehensive system
to identify, assess and mitigate risk is in place. The Board is responsible for setting the Group’s
risk appetite and risk management framework. The Board’s oversight is supported by the Audit
and Risk Committee and the Senior Leadership Team.
Shareholders
Board
@
Chairman
@
Senior Independent Director
@
Independent
Non-Executive Director
@
Chief Financial Officer
@
Non-Executive Director
@
Independent
Non-Executive Director
@
Chief Executive Officer
Executive Committee
Chief Executive Officer
Chief
Financial
Officer
Chief
Product
Officer
Chief
Strategy
Officer
Chief
Information
Officer
Chief HR
Officer
Chief
Technology
Officer
Senior Vice
President
Energy BU
Board
Committees
Remuneration
Committee
Nomination and
Governance Committee
Audit and Risk
Committee
Strategic Report Corporate Governance Financial Statements 91
EUROWAG Annual Report and Accounts 2023
The Group sets risk management based on the three lines of defence and the Board receives regular
updates from the second and third lines of defence. The Company’s outsourced Internal Audit function
provides independent assurance to the Senior Leadership Team, the Audit and Risk Committee,
and the Board, with respect to the effectiveness of the Group’s internal control environment.
Further information on the Company’s internal controls framework can be found on page 39.
Board governance framework
Board independence
The Board of Directors is expected to exercise independent judgement, free from external
interference, in order to fulfil its duty to promote the success of the Company for the benefit of
its members as a whole.
The Independent Non-Executive Directors act as a sounding board for the Executive team,
providing constructive challenge and further guidance given their varied expertise and skillsets.
The Board collaborates well to achieve its shared purpose, and all Directors are given the
opportunity to raise questions and probe issues further within meetings. This cohesive
environment improves the quality of discussion and, as a result, allows for more effective
decision making. The varied experience on the Board adds value to these discussions, and the
Executive team welcomes suggestions and advice based on the past experience of the
Independent Non-Executive Directors.
The Board also has a Non-Independent Non-Executive Director, Joseph Morgan Seigler, who is
nominated to the Board by its major shareholder, Bock Capital EU Luxembourg WAG S.à.r.l.
Morgan is subject to the same duties and responsibilities as fellow Board members to exercise
independent judgement and avoid conflicts of interest.
The Group has taken steps to avoid undue influences impacting Board decision making. The
Directors promptly inform the Company Secretary where there has been a change to their
external interests or relationships in order to ensure the Company has an accurate register of this
information, to ensure conflicts of interest are avoided. Further steps taken include the
implementation of shareholding agreements, relationship agreements, and other relevant
processes and procedures.
Our Board composition is designed to ensure that no individual(s) dominate(s) decision making,
and to minimise the risk of issues such as groupthink. The independence of the relevant
Non-Executive Directors is revisited at each Board meeting, and the Directors are also each
requested to confirm whether they have any conflicts of interests pertaining to the content
tabled for discussion. These processes ensure that external influences do not compromise the
independent judgement of the Directors.
Both upon appointment and on an ongoing basis, Directors are required to provide requisite
information to allow the Board, aided by the Nomination and Governance Committee, to ensure
their independence. Following the provision of this information, the Board is satisfied that there
are no matters that give rise to conflicts of interest which could compromise the independence
of the Independent Non-Executive Directors.
Time commitment
Our Chairman, Independent Non-Executive Directors and Non-Independent Non-Executive
Director are not employed in an executive capacity by the Company. These Board members have
received letters of appointment, which provide the main terms of their respective appointments
to the Board and cover an initial term of three years. Following the provisions of the Code, all
Directors are put forward for initial election and thereafter annual re-election by shareholders at
the Company’s AGM.
The appointment letters further provide time commitment expectations of each Director in their
role. Independent Non-Executive Directors can expect a typical time commitment of 26 days a
year on average, while Non-Independent Non-Executive Directors are expected to commit, on
average, 16 days per year.
Our Chairman, Paul Manduca, is expected to commit circa one day per week given the intricacies
of the role. These time frames are intended to serve as a guide, as the time commitment required
of Directors can fluctuate. All Board members are expected to devote sufficient time to
effectively discharge their duties.
The Board reviews the role profiles of each Director and the level of commitment required to
meet those requirements to act in the best interest of stakeholders. The external commitments
of the Directors are reviewed by the Nomination and Governance Committee on an ongoing
basis to ensure that they can fulfil the time commitment to successfully discharge their role. This
process is managed by the Company Secretary and the Chairman, and the complexity of each
external interest is examined, such as whether other sectors in which an individual operates are
highly regulated. Any changes to Directors’ external appointments are further reviewed by the
Nomination and Governance Committee. The Board has concluded that, notwithstanding
Directors’ other appointments, they are each able to dedicate sufficient time to fulfil their duties
and obligation to the Company.
Strategic Report Corporate Governance Financial Statements92
EUROWAG Annual Report and Accounts 2023
Directors’ attendance at Board and
Committee meetings for the year ended
31 December 2023
Members Board of
Directors
(scheduled/ad
hoc)
Audit and
Risk
Committee
Nomination
Committee
(scheduled/ad
hoc)
Remuneration
Committee
(scheduled/ad
hoc)
Paul Manduca*
6/6 scheduled
3/3 ad hoc
N/A 3/3 scheduled
2/2 ad hoc
N/A
Martin
Vohánka
6/6 scheduled
1/3 ad hoc
N/A N/A N/A
Magdalena
Bartoś
1
2/2 scheduled
3/3 ad hoc
N/A N/A N/A
Oskar Zahn
2
3/3 scheduled N/A N/A N/A
Sharon
Baylay-Bell*
6/6 scheduled
3/3 ad hoc
5/5
scheduled
3/3 scheduled
2/2 ad hoc
4/4 scheduled
1/1 ad hoc
Mirjana Blume*
6/6 scheduled
3/3 ad hoc
5/5
scheduled
3/3 scheduled
2/2 ad hoc
4/4 scheduled
1/1 ad hoc
Caroline Brown
3
3/3 scheduled
2/3 ad hoc
3/3
scheduled
1/1 scheduled
0/2 ad hoc
2/2 scheduled
0/1 ad hoc
Steve Dryden*
4
3/3 scheduled 2/2
scheduled
2/2 scheduled 2/2 scheduled
Susan Hooper*
6/6 scheduled
3/3 ad hoc
5/5
scheduled
3/3 scheduled
2/2 ad hoc
4/4 scheduled
1/1 ad hoc
Joseph Morgan
Seigler
5
5/6 scheduled
2/3 ad hoc
N/A N/A N/A
* Denotes Independent Director.
Notes:
2. Oskar Zahn was appointed as a Director with effect from 12 May 2023.
3. Caroline Brown resigned as a Director with effect from 11 May 2023.
4. Steve Dryden was appointed as a Director with effect from 1 June 2023.
5. Joseph Morgan Seigler was unable to attend a scheduled meeting of the Board of Directors due
to personal illness, and an ad hoc meeting due to a scheduling conflict.
Individuals such as the Chairman, the Chief Executive Officer, the Chief Financial Officer, among other members
of management and external advisors may be invited to attend all or part of any meeting as and when deemed
appropriate and necessary with the agreement of the respective Chair.
Board roles and their responsibilities
Chairman Chief Executive Officer Chief Financial Officer
@
Ensure all Non-Executive Directors
have the opportunity to effectively
contribute, through engagement in
open and honest discussions
@
Oversee the effectiveness and
suitability of the Company’s
governance processes, with support
from the Company Secretariat
@
Ensure the Board receives accurate
and timely papers to accommodate
the fulfilment of its duties
@
Continually monitor the long-term
development of the Group and ensure
that effective strategic planning is
undertaken
@
Devise the strategy and
long-term objectives of
the Group in-line with
established risk appetite
@
Maintain oversight over
operational performance
and report accurately to
the Board and its
Committees
@
Ensure the Board’s
strategies, objectives
and decisions are
implemented in a timely
and effective manner
@
Oversee the day-to-day financial
management of the Group
@
Provide strategic financial leadership,
creating the necessary policies and
procedures to ensure sound financial
management
@
Ensure the accuracy, integrity and
timeliness of financial reporting and
compliance with any relevant reporting
and accounting standards
Senior Independent
Non-Executive Director Company Secretary Non-Executive Directors
@
Provide a sounding board for
the Chairman
@
Serve as an intermediary for
other Directors
@
Be available to shareholders where
other channels of communication are
inappropriate
@
Lead the annual evaluation of the
performance of the Chairman
@
Act as the trusted advisor
to the Board and its
Committees on all
corporate governance
matters
@
Provide constructive challenge to the
Executive Directors and other members
of the Senior Leadership Team
@
Contribute to the development of
strategy and provide oversight to
ensure its execution
@
Apply independent and impartial
experience and expertise
@
Oversee the effectiveness and integrity
of the Company’s financial reporting
and risk management systems
Corporate governance report continued
Strategic Report Corporate Governance Financial Statements 93
EUROWAG Annual Report and Accounts 2023
Nomination and Governance
Committee report
Nomination and Governance Committee report
The Nomination and Governance Committee has
continued to work to strengthen the skills and
expertise of our Board.“
Dear shareholders,
In this Nomination and Governance Committee
report for the year ended 31 December 2023, I
am pleased to describe our considerations,
discussions and outcomes from the year. The
Nomination and Governance Committee
the Board and of the Committee), and all four
Baylay-Bell, Mirjana Blume, Steve Dryden and
Susan Hooper). The biographies of each
member of the Committee are set out on
pages 80 to 83. The Committee met five times
during 2023, at which time we reviewed the
composition of the Board considering the
relevant and necessary knowledge, skills,
expertise and diversity of each Director. We
also reviewed the succession plans for both
the Board of Directors and Senior Leadership
Team and had oversight of the externally
facilitated evaluation of the Board. In the first
half of 2023, the Committee was engaged in
the nomination process and eventual
appointment of Oskar Zahn as Chief Financial
Officer and Steve Dryden as Independent
Non-Executive Director.
In February 2024, our Committee revised its
Terms of Reference to establish a Nomination
and Governance Committee, which provides
additional remit over corporate governance
considerations. The change affirms our
commitment to developing a robust
governance framework based on best practice,
to support our business.
As the Chair of the Nomination and
Governance Committee, I lead my Committee
colleagues to fulfil the responsibilities of the
Committee, notably to ensure the
effectiveness of the Board, through its
governance frameworks, processes and
composition, at present and for the future.
PaulManduca
ChairoftheNominationand
GovernanceCommittee
Strategic Report Corporate Governance Financial Statements94
EUROWAG Annual Report and Accounts 2023
Nomination and Governance Committee report continued
Committee overview
@
The Committee is composed of the
Chairman of the Board and all four of the
Independent Non-Executive Directors
@
All members have relevant expertise to
support the Committee
@
Meetings are attended by the Executive
Directors, and other relevant attendees,
by invitation of the Chairman, where
attendance would support the Committee
in fulfilling its responsibilities
Key responsibilities
@
Monitor the governance framework,
including the structure, size and
composition of the Board and its
Committees, to ensure a balance of skills,
knowledge, experience and diversity
@
Lead a rigorous and transparent process
for identifying and selecting candidates to
serve as Directors on the Board and its
Committees and make recommendations
to the Board for their appointment
@
Develop and implement effective
succession plans for the Board, its
Committees and the Senior Leadership
Team, having regard to the skills and
expertise needed to ensure the long-term
sustainable success of the Company
@
Oversee the development of a diverse
talent pipeline and monitor the Company’s
diversity policies and initiatives, including
their effectiveness
@
Review the external directorships
and commitments of the
Non-Executive Directors
@
Assist the Chairman in ensuring there is
a rigorous annual evaluation of the
performance of the Board, its Committees,
the Chairman and individual Directors
@
Ensure that appropriate procedures are in
place for training and developing Directors
@
The Committee’s Terms of Reference,
which are reviewed and approved
annually, are available on the Company’s
website at https://investors.eurowag.com
Highlights during 2023
@
Oversight of the Company’s first externally
facilitated Board evaluation
@
Nomination and appointment of Oskar
Zahn as an Executive Director and Chief
Financial Officer
@
Nomination and appointment of
Steve Dryden as an Independent
Non-Executive Director, and Chair
of the Audit and Risk Committee
@
Consideration, and recommendation to
the Board, of the election/re-election of
each continuing Director ahead of their
election/re-election by shareholders at the
Company’s 2023 AGM
@
Review of succession plans for the Board
of Directors, its Committees and the
Senior Leadership Team
@
Review of the external appointments
and the time commitments of the
Non-Executive Directors
@
Reviewed the skills and the composition of
the Board of Directors, and its Committees
@
Reviewed the structure of fees for the
Independent Non-Executive Directors
Focus areas for 2024
@
Implementation of the actions arising from
the externally facilitated Board evaluation
undertaken in December 2023
@
Continued review of succession plans for
the Board of Directors and Senior
Leadership Team
@
Continued strengthening of the Board of
Directors and its governance processes
@
Continued focus on diversity in all
aspects within the Group, including the
requirements of the Parker Review, the
FTSE Women Leaders Review, and the
targets set out under the FCA Listing Rules
@
Implementation of the updated Terms
of Reference with respect to
corporate governance
@
Oversee the onboarding for the
newly appointed Independent
Non-Executive Directors
@
Monitor the implementation of the newly
published UK Corporate Governance
Code 2024
Director nomination processes
The Company made two Director appointments
during 2023, and we welcomed Oskar Zahn as
the Chief Financial Officer in April 2023 and
Steve Dryden as an Independent Non-Executive
Director in June 2023. These appointments
as Chief Financial Officer in April 2023 and the
retirement of Caroline Brown as Independent
Non-Executive Director in May 2023.
The Nomination and Governance Committee had
oversight of the rigorous search, selection and
nomination processes which were supported by
an external search agent. In both nomination
processes, the Committee identified the search
criteria and reviewed relevant documentation
provided by the search agent, including a longlist
and shortlist of candidates, their curricula vitae
and feedback from the assessment and
interview process. The Committee assessed the
candidates, giving due consideration to their
knowledge, skills, experience and background,
alongside the needs of the Company.
In February 2023, the Committee reviewed the
nomination of Oskar Zahn as the Chief Financial
Officer and Executive Director of the Company
and recommended his appointment to the
Board. The selection process was supported
by the external search agent, Odgers
Berndtson. During the selection process, over
60 candidates were assessed, from which a
shortlist of 20 candidates was presented to the
Chief Executive Officer and 10 candidates were
then interviewed. On completion of the
interview process, Oskar Zahn was assessed
against the Korn Ferry leadership assessment
criteria, which was created explicitly for the
purpose of leadership selection.
Strategic Report Corporate Governance Financial Statements 95
EUROWAG Annual Report and Accounts 2023
To support the Chief Financial Officer
transition process and help ensure continuity
and best success in the role, an interim Chief
Financial Officer, David Forth, was appointed.
David Forth held the role from 1 February 2023
to his departure from the business on
29 September 2023.
In April 2023, the Committee reviewed the
nomination of Steve Dryden as an Independent
Non-Executive Director and successor as the
Chair of the Audit and Risk Committee and
recommended his appointment to the Board.
The selection process was supported by the
external search agent, Korn Ferry. During the
selection process, the Committee received a
longlist of 18 candidates from Korn Ferry, of
which five were female. The top six candidates
were then shortlisted and five went through
the interview process.
On 1 March 2024, Sophie Krishnan and Kevin Li
Ying were appointed as Independent
Non-Executive Directors, and members of
the Audit and Risk Committee and the
Remuneration Committee. These appointments
followed a robust appointment process which
was supported by the external search agent,
Korn Ferry. During the selection process, the
Committee reviewed the candidate
specifications and agreed that expertise in
product technology and technology
transformation was desired. The Committee
received from Korn Ferry a longlist of 15
candidates in September 2024 and a shortlist
of five candidates, of which three were female
and two were from an ethnic minority
background. The interview processes noted
that Sophie Krishnan and Kevin Li Ying were
each qualified and capable candidates with the
necessary skills and experience to be
appointed as Directors of our Company.
During 2024, the Committee will lead any
nomination process for new Directors, as
required by vacancies and ongoing succession
planning. The formal nomination process, as
agreed by the Directors and in-line with
governance best practice, will continue to be
followed. The Board has ultimate responsibility
for any consideration of nominations based on
merit against objective criteria, with regard to
diversity factors, as identified by the
Nomination and Governance Committee.
Succession planning
The Committee regularly reviews and updates
the succession plans for the Board and Senior
Leadership Team. In the course of its reviews,
the Committee considered the appointment
profile of each Director, including relevant
expertise and diversity, over the three-year
time horizons to capture plans for contingency,
in the medium-term and in the longer term, to
ensure the long-term success of our Company.
Board
As part of its review of Board succession plans
during 2023, the Committee reviewed the skills
and expertise of the independent Non-Executive
Directors, which supported succession planning
discussions. During its review of the Directors,
the Committee had regard for matters such as
external appointments and time commitment, as
well as the benefits of diversity including gender,
social, ethnic and cognitive. Following its review,
the Committee concluded that the Board should
strengthen its expertise in digital platforms and
technology transformation to further align with
the Company’s strategy. The Board’s expertise in
these areas were strengthened through the
appointment of Sophie Krishnan and Kevin Li
Ying who joined the Board in March 2024.
The Committee reviewed the composition of
the Board in March 2024 and concluded that
the existing composition of our Board was
appropriate to meet the current leadership
needs of the business. The Committee will
continue to review the composition of the
Board and its succession plans and make
recommendations to the Board that would
strengthen and enhance the Board’s
capabilities and expertise.
The Committee is committed to promoting
diversity of thought, and for the Board and
Senior Leadership Team to be representative
of the communities in which the Company
operates, including industry and geographic
presence. The Committee values the diverse
skills, experiences and backgrounds that
comprise the Board, which are strategically
aligned to the Company’s purpose and values.
Senior Leadership Team
The Committee maintains oversight over the
succession plans and ongoing development
of the Company’s Senior Leadership Team. In
December 2023, the Committee reviewed the
succession plans for the Executive Committee
members, as well as the plans for the target
model for the organisational design of the
Executive Committee for the years 2024, 2025
and 2026. In its review, the Committee
considered the alignment to the Company’s
strategic plans, including its transition to a
provider of financial technology. The Committee
is committed to ensuring the development of
the Company’s top performers, and their
readiness to join the Senior Leadership Team,
through its review of succession plans.
Diversity and Inclusion Policy
In December 2022, the Board established its
Policy on diversity and inclusion, which was
reviewed by the Committee and reaffirmed in
December 2023. The purpose of the Policy is
to ensure the Board and the Committee is
comprised of a diverse and inclusive
membership which will enhance decision
making and promote the best success of our
Company. The Committee values the benefits
of diversity of thought, alongside diversity of
skills, experiences and backgrounds, in its
considerations of appointments to Board and
Senior Leadership Team positions. The
Company requires that appointments consider
diversity, while ensuring roles are offered on
merit against objective criteria to the best
available candidate. The policy set by the
Board aspires to commit to no less than 50% of
women on the Board and at least one Director
from a minority ethnic background as a
medium-term objective.
The Committee regularly reviews the
composition of the Board and its Committees
and is committed to meeting the targets as set
in the FTSE Women Leaders Review, the Parker
Review on Diversity and the FCA Listing Rules.
Strategic Report Corporate Governance Financial Statements96
EUROWAG Annual Report and Accounts 2023
Training and ongoing
development
The Committee maintains oversight of the
programme to induct and onboard future
Director appointments, and the plans to
enhance the integration for recently appointed
Directors to further their understanding of the
Company, with a focus on its people and
culture. This includes ongoing activities to
engage its people, further details of which can
be found on page 29.
During the year, the Board engaged in training
on human rights, climate and climate risk, the
current Code and the FCA Listing Rules. At its
strategy day in July 2023, the Board received
updates on customer and product strategy,
financing and e-wallet products, and the
eMobility business. During the course of 2024,
the Committee will oversee the Directors’
training on a range of topics.
Board evaluation
On an annual basis, the Board has evaluated
its own performance and that of its
Committees, as well as the individual
performance of the Chairman and each
Director. The Company undertook its first
externally facilitated Board evaluation during
2023. The Board evaluation included a
questionnaire and interviews, facilitated by
Lintstock. In September 2023, Lintstock
presented its plans for the approach and
conduct of the Board evaluation which were
discussed and agreed by the Committee.
During 2024, the Committee will support the
Board, including the Chairman, to implement
the actions to enhance the Board operations.
The evaluation considered the effectiveness
of the Board and its Committees as a whole.
Topics discussed during the evaluation
included Board composition, stakeholder
oversight, boardroom dynamics, the
management and focus of meetings, the
quality of Board support, succession plans and
talent management, and priorities for change.
Each Director completed a questionnaire and
was interviewed by Lintstock to capture their
professional feedback. The results were
reviewed by the Chairman who discussed the
findings with the Board. In March 2024,
Lintstock presented the findings of the
evaluation to the Board, including analysis
against the Lintstock Governance Index, a
metric-based comparator. The Board discussed
the findings and agreed the priorities and
action plans to enhance the Board’s operations.
The key areas for focus during 2024 were
identified, including succession planning and
diversity, strengthening processes and
information flow to the Board and building
capacity and oversight.
A separate evaluation of the Chairman was
conducted by Lintstock with the Senior
Independent Director. The Directors
completed a Chairman evaluation
questionnaire, the responses of which were
reviewed by the Senior Independent Director
who then met with the Chairman to discuss
and address any points of action.
Committee evaluation
As part of the Board evaluation conducted
during 2023, the Committee reviewed its own
performance. The Committee will continue to
monitor the implementation of the action plans
during 2024 to ensure the continual
improvement of the Committee’s operations.
Annual re-election of Directors
In accordance with the Code, all Directors will
stand for election or re-election by
shareholders at the 2024 AGM. Both the
Committee and the Board are satisfied that all
Directors continue to be effective in, and
demonstrate commitment to, their respective
roles on the Board. The Committee believes
each Director makes a valuable contribution
to the leadership of the Company. The Board,
therefore, recommends that shareholders
approve the resolutions to be proposed at
the 2024 AGM relating to the re-election of
the Directors.
PaulManduca
ChairoftheNominationandGovernance
Committee
25 March 2024
Nomination and Governance Committee report continued
Strategic Report Corporate Governance Financial Statements 97
EUROWAG Annual Report and Accounts 2023
Audit and Risk Committee report
Audit and Risk Committee report
The Committee has diligently assessed financial
performance, controls reporting, internal audit reports
and the risk management framework.“
Dear shareholders,
As the Chair of the Audit and Risk Committee,
I am pleased to present the Committee’s
report summarising our activities during the
financial year ended 31 December 2023, and
my first report to you as Chair of the Audit
and Risk Committee, having stepped into the
role in June 2023.
The priority areas of the Committee this year
have revolved around ensuring the timely
implementation of robust procedures in
financial reporting, IT general controls, system
transformation, compliance and the Speak Up
the Committee has diligently assessed financial
performance, controls reporting, internal audit
reports and the risk management framework.
The Committee is composed entirely of
Independent Non-Executive Directors, whose
detailed biographies can be found on pages
80 to 83. The expertise of the Committee
covers accounting, internal and external
auditing, and the necessary business
experience to fulfil their duties as Committee
members. Committee meetings are routinely
attended by the Chairman of the Board, the
Chief Financial Officer, the Group’s External
Auditors (“PwC”), the Internal Auditors
members of the management team. Both PwC
and KPMG have consistently participated in all
Committee meetings throughout the year
ended 31 December 2023, and will continue to
do so in future meetings.
SteveDryden
ChairoftheAuditand
RiskCommittee
Strategic Report Corporate Governance Financial Statements98
EUROWAG Annual Report and Accounts 2023
Audit and Risk Committee report continued
Committee overview
@
Comprises four Independent
Sharon Baylay-Bell and Susan Hooper)
@
Steve Dryden and Mirjana Blume are
considered by the Board to have recent
and relevant accounting experience.
All members have relevant commercial
and operating experience
@
Five meetings have been held during
the year ended 31 December 2023
@
Meetings are attended by the Chairman
of the Board and Chief Financial Officer,
other members of management, the
Internal Auditors, and the External
Auditors, by invitation of the Chair
Focus areas for 2024
@
Review and scrutinise the preparation of
the Annual Report and Accounts for the
year ended 31 December 2023,
including significant financial reporting
issues and judgements
@
Monitor the implementation of controls
around the financial position and M&A
@
Assist the Board in its review of
the effectiveness of the Group’s
systems of internal control and risk
management methodology
@
Review and advise the Board on the
effectiveness of the Group’s
whistleblowing procedures
@
Review the performance of the External
Auditors and the Internal Auditors
@
Undertake an externally facilitated
review of the Committee’s performance,
composition and Terms of Reference
Key responsibilities
The Committee’s main responsibilities,
as outlined in its Terms of Reference, are:
@
Recommending the half and full-year
financial results to the Board
@
Maintaining the integrity of all financial and
non-financial reporting, including review of
significant judgements and estimates
@
Monitoring the Group’s internal financial
controls and risk management systems
@
Overseeing the relationship with the
External Auditors and reporting the
findings and recommendations of the
Auditors to the Board
The Committee’s Terms of Reference,
which are reviewed and approved annually,
are available on the Company’s website at
https://investors.eurowag.com.
The Committee has evaluated the contents of
the Annual Report and Accounts and believes
that it provides the essential information
needed to assess the Group’s performance,
business model and strategy. Taken as a
whole, the report is deemed fair, balanced and
understandable. This Committee report should
be read in conjunction with the Financial
review on pages 32 to 38, the Risk
management section on pages 39 to 46, the
External Auditors’ report on pages 130 to 135,
and the Group Financial statements on pages
137 to 200.
I will be available at the AGM to address any
enquiries from shareholders regarding the
Committee’s activities this year.
Activities of the Committee
The Committee has focused on the audit,
assurance, and risk and compliance processes
within the business. The Committee’s role is to
ensure that management’s disclosures reflect
the supporting detail provided to the
Committee throughout the year, challenging
where necessary and, in some cases,
requesting items to be re-presented, in order
for the Committee to further understand
certain matters. The Committee reports its
findings and makes recommendations to the
Board in the form of Committee reports at
each Board meeting. Individual items of
business considered by the Committee,
including as part of the Annual Report and
Accounts process, are set out below:
I would like to take this opportunity to thank
the dedicated members of the finance, risk
and compliance teams as well as our external
assurance providers, for their hard work
throughout this financial year.
SteveDryden
ChairoftheAuditandRiskCommittee
25 March 2024
Strategic Report Corporate Governance Financial Statements 99
EUROWAG Annual Report and Accounts 2023
Actions Outcomes Cross-reference
Annual reporting
External audit
planning and key
accounting matters
The Committee received and approved the
external audit plan and audit fee proposal for
PwC in December 2023.
pages 103 and 105
Review of significant
financial reporting issues
and key judgements
The Committee received and approved
management’s accounting paper and PwC’s
audit findings in March 2023, in respect of
the 2022 Annual Report and Accounts.
The Committee received and approved
management’s accounting paper and PwC’s
audit findings in March 2024, in respect of
the 2023 Annual Report and Accounts.
page 100
Review of Going concern
and Viability statements
The Committee received and approved
management’s paper on Going Concern and
Viability in March 2023, in respect of the
2022 Annual Report and Accounts, and in
February 2024 in respect of the 2023 Annual
Report and Accounts.
page 47
Review of Annual Report The Committee recommended the 2022 Annual
Report and Accounts to the Board in March 2023,
and recommended the 2023 Annual Report and
Accounts to the Board in March 2024.
n/a
Review and actioning
of contents within the
Financial Reporting
Council’s (“FRC”) letter
In August 2023, the Company received a letter
from the FRC, asking it to clarify certain
disclosures made in the 2022 Annual Report and
Accounts. The Committee oversaw the process
of reviewing the relevant disclosures and
responding to the FRC with clarifications. The
Committee has also undertaken a thorough
review of the 2023 Annual Report and Accounts
against the FRC letter, in order to ensure each
point has been adequately addressed.
n/a
Actions Outcomes Cross-reference
Risk management and internal control
Risk management
framework and
risk registers
The Committee reviewed the 2023 risk
management framework. The Committee
reviewed a new risk management framework
and evaluated the risk appetite for the top 30
items in the risk register.
page 39
Review of principal
and emerging risks
The Committee and the Board completed a
robust assessment of the Company’s emerging
and principal risks, along with their associated
appetite limits. As part of its review, the
Committee scrutinised the procedures in place
to identify emerging risks, and how these are
being managed and mitigated. Details of the
risks approved by the Board can be found in
the Risk section of this report.
page 40
Review of internal
controls
The Committee reviewed the internal control
reporting for 2023 and reviewed the design
and effectiveness of the internal controls in
December 2023.
page 103
Approved internal
audit plan
The Committee approved the internal audit plan
for 2024 in December 2023.
page 105
Governance
External Auditors review During the year the Committee reviewed the
effectiveness of the External Auditors, through
an External Auditors questionnaire distributed
to the Board and senior management.
Lessons learnt from the previous year’s audit
were suggested with improvement areas
firmly identified.
page 103
Committee Terms of
Reference
The Committee reviewed and agreed the Terms
of Reference for the Committee.
investors.eurowag.
com
IT general controls The Committee received regular reports on the
IT general controls internal audit, and reviewed
the IT general controls mitigation plan, which
had been aligned with revised internal processes
and optimised in light of the prior year’s Internal
Audit report on IT general controls.
page 103
Strategic Report Corporate Governance Financial Statements100
EUROWAG Annual Report and Accounts 2023
Audit and Risk Committee report continued
Actions Outcomes Cross-reference
KPIs and metrics The Committee continued to review, challenge
and recommend metrics and indicators to
enhance the Company’s control environment. In
particular, the Committee reviewed the
externally reported environmental metrics and
recommended them to the Board for approval.
page 25
Mergers and acquisitions The Committee received reports on M&A
financial performance, as well as reviewing and
challenging external assurance and integration
plans in relation to the Company’s acquisitions.
page 46
Key accounting issues, significant judgements and significant estimates
In the preparation of the Group’s 2023 financial statements, the Committee assessed the accounting principles and policies adopted, and whether management had made appropriate estimates
and judgements. In doing so, the Committee discussed management reports and enquired into judgements made and discussed key matters with the External Auditors.
The significant issues considered by the Committee in relation to the financial statements include:
Significant judgements
and significant estimates Summary
Principal vs agent
consideration
(significant judgements)
The Group has considered whether it acts as a principal or an agent in the
acceptance business model (see explanation of the business models used in sales
an integrated web-based solution comprising advice on where to buy energy,
offering discounted energy prices that are independent of pricing of the Group’s
suppliers, use of payment cards, extended payment terms and administration of the
energy sales transaction. The Group sells energy to its customers under one
contract covering sales transactions realised under the two business models used
by the Group and described in Note 4.3. In the case of the acceptance business
model, the principal versus agent assessment involves significant judgement. The
Group has some element of control in that it has agreed minimal supply with the
acceptance partners which required them to have the energy available, however,
the energy is fungible and the Group does not typically pay in advance. The
customer might also purchase the energy directly from the acceptance partner,
instead the customer is selecting the most advantageous price available on the
Group’s website, choosing the right location (and supplier/partner) on his route
where he can make the purchase only with the Group’s payment card.
In applying the judgement, management concluded that the Group is the principal
mainly because it is the primary obligor in respect of delivery of energy and
related services to its customers. The Group is also responsible for sales strategy,
decides whether to accept or reject customers and carries credit risk from
customer receivables.
Management also considered the following additional control indicators:
@
The Group has discretion in establishing the price for the specified energy
independent from the prices of petrol stations under the acceptance model.
In the past, the Group has often revised its prices as a reaction to market
development or inflation
@
The Group has the right to choose its suppliers. When the bunkering model is
not suitable along the main truck routes, the Group is choosing from possible
acceptance partners, which are considered attractive by its customers
Actions Outcomes Cross-reference
Anti-Money Laundering
The Committee received updates from the AML
Officer, and reviewed and approved the Group’s
AML Policy. It also received updates on the
annual compliance report, and reviewed and
approved the compliance action plan.
page 45
Finance internal controls The Committee received updates on internal
controls specifically around finance and
financial reporting.
page 103
Speak Up
The Committee reviewed and approved the
adjacent whistleblowing procedures and
implemented various employee awareness
initiatives through the Speak Up
page 105
Strategic Report Corporate Governance Financial Statements 101
EUROWAG Annual Report and Accounts 2023
Significant judgements
and significant estimates Summary
Put options
granted to
non-controlling
interests (“NCI”)
(significant judgements)
The Group concluded that it does not, in substance, acquire present access to
economic benefits of acquired subsidiaries KomTes Chrudim s.r.o. and FIRETMS.
COM. The put option redemption liability will be settled with a transfer of the
non-controlling interest’s shares for a price that is deemed to approximate their fair
value. Therefore, the non-controlling shareholders have retained the risks and
rewards associated with ownership until the options are exercised and non-
controlling interest is recognised in equity until then.
Functional currency
of W.A.G. payment
solutions, a.s.
(significant judgements)
Following the Inelo acquisition and significant increase in EUR borrowings in
March 2023, which is being repaid from cash generated and retained mainly in
EUR by W.A.G. payment solutions, a.s., the management considers EUR to be the
IAS 21, the management has reviewed primary (currency influencing mainly sales
prices and settlement of energy and cost of energy sold) and secondary factors
(currency of financing and retained cash) including integration activities in the
European area and concluded that CZK is no longer the primary currency in
which the entity receives and expends cash. This represents a significant
judgement as the Group would recognise foreign exchange loss of EUR 12 million
and foreign currency translation reserve would be higher by EUR 17 million with
CZK functional currency of the entity for the year ended 31 December 2023.
Following change of the functional currency, the entity recognised foreign
Adjusting items
(significant judgements)
In determining whether an item should be presented as an adjusting item to IFRS
measures, the Group considers items that must initially meet at least one of the
following criteria:
@
It is a significant item, which may cross more than one accounting period
@
It has been directly incurred as a result of either an acquisition, capital
restructuring or relates to Group’s strategic transformation programme as
these are not part of the Group’s underlying trading activity
If an item meets at least one of the criteria, the Board, through the Audit and Risk
Committee, exercises judgement as to whether the item should be classified as
an adjusting item to IFRS performance measures. A list of these items including
definitions and exclusion justifications are disclosed in Note 11.
Cash Generating Unit
(“CGU”) structure for
Energy and FMS
(significant judgements)
CGU is the smallest identifiable group of assets that generates cash inflows
that are largely independent of the cash inflows from other assets or groups of
assets. Consistently with prior periods, the Group has identified five CGUs in
After reviewing results of impairment testing, the CGU structure represents a
significant judgement for Fleet management services and Energy as higher
impairment loss might be recognised under a different CGU structure regarding
ADS and Webeye acquisitions. The Group considers its CGU structure appropriate
mainly due to the current level of integration and ownership of key IP and software
systems by W.A.G. payment solutions, a.s. The Group is not budgeting and
reporting these acquisitions separately in its management reporting due to the
fact that the cash inflows from ADS and Webeye acquisitions are not considered
to be largely independent of the other cash inflows.
Strategic Report Corporate Governance Financial Statements102
EUROWAG Annual Report and Accounts 2023
Audit and Risk Committee report continued
Significant judgements
and significant estimates Summary
Impairment of
non-financial assets
(significant estimates)
Impairment exists when the carrying value of an asset or CGU exceeds its
recoverable amount, which is the higher of its fair value less costs of disposal
and its value in use. The fair value less costs of disposal calculation is based on
available data from binding sales transactions, conducted at arm’s length, for
similar assets or observable market prices less incremental costs for disposing
of the asset. The value in use calculation is based on a discounted cash flow
(“DCF”) model. The cash flows are derived from the budget and forecasts for the
next five years and do not include restructuring activities that the Group is not
yet committed to or significant future investments that will enhance the asset’s
performance of the CGU being tested. The recoverable amount of Fleet
management solutions CGU is sensitive to the discount rate used for the DCF
model as well as the expected future cash-inflows and the growth rate used for
extrapolation purposes. These estimates are most relevant to goodwill. The key
assumptions used to determine the recoverable amount of the CGUs are disclosed
and further explained in Note 19.
Inelo contingent
consideration
(significant estimates)
Contingent consideration to be transferred by the acquirer is recognised at fair
value at the acquisition date. Contingent consideration of Inelo is based on
EBITDA performance for the year to 31 December 2022 and is capped at
EUR 12.5 million. The Group will either pay full consideration or no consideration
is payable.
The Group has completed the calculation of 2022 EBITDA and concluded it to
be below the required target level. Negotiations remain ongoing, the outcome
is uncertain, however the Group believes that the performance condition has not
been met and therefore zero contingent consideration is presented as at
31 December 2023.
Further information is available within the Independent Auditors’ report on pages 130 to 135.
Our disclosures against the Code are
reviewed by the Internal Audit team and
reported to the Committee.
FRC letter
In August 2023, the FRC’s Corporate Reporting
Review Team (“CRRT”) sent a letter to the
Company asking for clarification or further
information in certain areas with respect to
the 2022 Annual Reports and Accounts.
The CRRT found no required amendments or
restatements to the 2022 Annual Report and
Accounts, and relevant enhancements to the
have been considered within the 2023 Annual
Report and Accounts.
As part of its work during 2023, the Committee
reviewed the letter and provided a detailed
response to the FRC in September and
November 2023. The response addressed
each area in turn and provided further
information and clarification where necessary.
As part of its role in the 2023 Annual Report
and Accounts, the Committee incorporated
the FRC’s comments within the overall
checking process, to ensure that each area
had been included, or sufficiently addressed
where necessary.
Fair, balanced and
understandable
The Committee carried out a thorough review
of the Group’s Annual Report and Accounts.
The Committee gave particular consideration
to whether the Annual Report and Accounts,
taken as a whole, was fair, balanced and
understandable, concluding it was.
To make this assessment, the Committee
received copies of the Annual Report and
financial statements to review during the
drafting process, to ensure that the key
messages being followed aligned with the
Company’s position, performance and strategy
being pursued and that the narrative sections
of the Annual Report were consistent with the
financial statements. After consideration of all
of this information, we are satisfied that, when
taken as a whole, the 2023 Annual Report and
Accounts is fair, balanced and understandable,
and provides the information necessary for
shareholders to assess the Group’s performance,
business model and strategy.
Going concern and
viability review
The Committee reviewed management’s
approach to the Going concern and Viability
statement prior to the year end and agreed
that a three-year horizon was appropriate for
viability reporting. After the year end, the
Committee reviewed management’s reports
setting out its view of the Group’s viability
including a description of the factors
considered in forming an assessment of the
Group’s prospects. The viability review was
based on the Group’s three-year strategic plan
and an analysis of the impact of the principal
risks relating to product demand decline risk,
technology security and resilience risk,
external parties dependency risk, physical
security risk and climate change risk, and
mitigating actions.
Having considered management’s assessment,
the Committee approved the Going concern
statement set out on page 49 to 50 and the
Viability statement set out on pages 47 to 49.
Strategic Report Corporate Governance Financial Statements 103
EUROWAG Annual Report and Accounts 2023
Risk and internal controls
The key elements of the Group’s internal control
framework and procedures are set out on pages
39 to 40. The principal risks the Group faces are
set out on pages 41 to 46. The Committee
devoted part of each meeting to discussions
concerning risk and its management.
The Executive Committee has established a
sub-committee, the Business Assurance
Committee. The sub-committee reports to the
Executive Committee and also has a separate
reporting line directly to the Audit and Risk
Committee where the Chair of the Business
Assurance Committee presents updates. The
executive sub-committee co-ordinates the
governance, risk and controls at the Group
level before reporting to the Committee and
the Board. During the year, the Committee
reviewed risk registers and the principal risks,
and challenged management in respect of the
Company’s risk management framework and risk
appetite statements ahead of Board discussions
to approve the Group’s final risk management
framework and risk appetite statements.
The material internal controls are in the
process of being reviewed by the Business
Assurance Committee and the Audit and Risk
Committee. The relevant material internal
controls have been defined and mitigate the
highest inherent risks of the Group and are
linked to the principal risks. The work to assure
the effectiveness of the material internal
controls is ongoing. As at 31 December 2023,
the results of overall testing showed that 56%
of the material internal controls were effective,
23% of the material internal controls were
partly effective and 21% of the material internal
controls were not effective. Partially effective
and not effective controls were discussed at
the Audit and Risk Committee. As a follow-up,
due dates for remediation of the partially
effective and not effective controls were
obtained from the control owners. Based on
the commitments made, the Group expects to
achieve approximately 90% effectiveness of
internal controls in Q4 2025. Progress will be
monitored and reported regularly to the Audit
and Risk Committee. The Audit and Risk
Committee, with support from the Business
Assurance Committee, will continue to oversee
the remediation and action plans to ensure the
effectiveness of all material internal controls.
In addition to the general internal controls and
risk management processes described on
pages 39 to 40, the Group also has specific
systems and controls to govern the financial
reporting process and preparation of the
Annual Report and Accounts. These systems
include clear policies and the procedures for
ensuring that the Group’s financial reporting
processes and the preparation of its financial
statements comply with all relevant reporting
requirements. Group accounting policies are
comprehensively detailed in the Group
accounting policy manual, which all
businesses are required to comply with in the
preparation of their results.
Compliance
The Committee, with support from reports from
the Chair of the Business Assurance Committee,
reviewed its assurance arrangements covering
legal, financial, tax, risk, IT and cyber security
and employment policies, identified areas where
additional assurance on Group compliance with
these policies and procedures was required and
agreed actions with management to obtain the
desired level of assurance.
FRC minimum standards for
audit committees
The Committee considers that the
requirements set out in FRC Audit Committees
and the External Audit: Minimum Standard
published in May 2023 have been applied and
the Committee is compliant with those
requirements. During the year, the Committee
reviewed its own Terms of Reference, with no
changes adopted, as the Committee’s
operations either meet or exceed the
requirements of the minimum standard.
Effectiveness of external audit
The Committee, on behalf of the Board, is
responsible for the relationship with the
Auditors, and in carrying out its oversight
evaluates the effectiveness of the Auditors
and statutory audit process. The quality of the
statutory audit is a principal requirement of the
annual audit process and is regarded by the
Committee as such.
The effectiveness of the external audit process
depends on appropriate risk identification. In
December 2023, the Committee discussed the
Auditors’ plan for the 2023 audit. This included
a summary of the proposed audit scope and a
summary of what the Auditors considered to
be the most significant financial reporting risks
facing the Group, together with the Auditors’
proposed audit approach to these significant
risks. In March 2024, the Auditors reported
against its audit scope, providing an
opportunity for the Committee to monitor
progress and raise questions, and challenge
both the Auditors and management.
The Auditors are invited to attend meetings of
the Audit and Risk Committee, as well as
meeting with management at regular intervals
during the annual audit process.
The Committee formally reviewed the
effectiveness of the 2022 external audit during
2023. The Committee will formally review the
effectiveness of the 2023 external audit during
the first half of 2024.
Auditors’ independence
The Committee keeps under review the cost
effectiveness, independence and objectivity
of the External Auditors. The Committee has
put in place a policy on the engagement of the
External Auditors to supply non-audit services
and a review of the effectiveness of the
External Auditors.
In assessing the independence of the Auditors
from the Group, the Committee takes into
account the information and assurances
provided by the Auditors, confirming that all
their partners and staff involved with the audit
are independent of any links to the Group. PwC
confirmed that all their partners and staff
complied with their ethics and independence
policies and procedures, which are fully
consistent with the FRC Ethical Standard,
including that none of their employees working
on the audit hold any shares in W.A.G payment
solutions plc.
PwC UK has audited the Company and Group
since 2021. PwC CZ audited the predecessor
group in 2019 and 2020. The lead audit partner
rotates every five years to assure
independence. PwC, Deloitte and former
External Auditor EY took part in the 2019 audit
tender process. PwC and EY were shortlisted,
and PwC were later selected as External
Auditors for the Group. Mr Mark Skedgel
became lead partner in late 2021, responsible
for the Group’s statutory audit for the 2021
year end onwards. The Committee has no
current plans to re-tender the audit.
Strategic Report Corporate Governance Financial Statements104
EUROWAG Annual Report and Accounts 2023
Audit and Risk Committee report continued
The Committee is satisfied that the Company
has complied with the provisions of the
Statutory Audit Services for Large Companies
Competitive Processes and Audit Committee
Responsibilities) Order 2014, published by
the Competition and Markets Authority on
26 September 2014. In recognition of
underlying Auditor rotation requirements,
the Committee currently intends that a tender
process will be undertaken during the year
to 31 December 2029 to cover the financial
year ending 31 December 2029 onwards.
The Committee will continue to review the
Auditors’ appointment each year to ensure
that the Company is receiving an optimal
level of service.
The Committee is satisfied that PwC continue
to be independent, and free from any
conflicting interest with the Group.
Non-audit services policy
The External Auditors are primarily engaged
to carry out statutory audit work. There may
be other services where the External Auditors
are considered to be the most suitable
supplier by reference to their skills and
experience. A policy is in place for the
provision of non-audit services by the External
Auditors, to ensure that the provision of these
services does not impair the External Auditors’
independence or objectivity, in accordance
with the FRC Ethical and Auditing Standards.
Board
Board
Committees
Audit and
Risk Committee
Senior Leadership Team
Internal
Audit
Security
VP Legal &
Compliance
Counsel)
Head of
Compliance
Process
Excellence
Head of
Risk
IT Risk
Executive Committee
Executive sub-committee
Legal & Compliance
Business Assurance Committee
Internal AuditRisk Security
Strategic Report Corporate Governance Financial Statements 105
EUROWAG Annual Report and Accounts 2023
Service Policy
AUDIT-RELATED SERVICES
May include the provision of services subject
to approval by the Audit and Risk Committee,
including capital markets services, review of
interim financial statements, compliance
certificates and reports to regulators.
All permitted non-audit services require
approval in advance by the Chair of the Audit
and Risk Committee or the Audit and Risk
Committee, subject to the cap of 70% of the
fees paid for the audit in the last three
consecutive financial years (the cap does
not apply until three years of audit fees have
been accumulated).
PERMISSIBLE SERVICES
Permissible services are detailed in the FRC’s
whitelist of Permitted Audit-Related and
Non-Audit Services. Any audit-related
service or non-audit-related service which
is not on the list cannot be provided by the
External Auditors.
Permissible in accordance with the FRC
Revised Ethical Standard 2019.
Non-audit services
Fees for non-audit services paid to PwC in 2023 include the cost of reporting accountant work
related to the acquisition of Inelo. Reporting accountant work is based on listing requirements
and is often performed by the existing audit firm due to the nature of the work and the continuity
of knowledge.
Internal audit
KPMG were appointed Internal Auditors for the Group in October 2021. This financial year, the
Committee reviewed various internal audit reports for 2023, and approved the Internal Audit
plan for 2024 in December. The Committee has assessed the effectiveness of the Internal Audit
function and has satisfied itself that the quality, experience and expertise of the function
continue to be appropriate for the business. The Committee will review the effectiveness of
the Internal Audit function again during 2024.
Audit fees for 2023
was for non-audit and other assurance services and €1.75 million was for the audit. The audit
The Committee reviewed the relatively high audit fee and was satisfied that it was appropriate,
given the amount of substantive testing undertaken. The non-audit fees resulted from assurance
services related to work as a reporting accountant due to the Inelo acquisition. Reporting
accountant work is subject to the non-audited services cap. Non-audit services represented
5.46% of fees paid to the External Auditors in the year. The Committee will continue to review
the non-audit fee ratio.
Whistleblowing
a range of employee awareness campaigns around whistleblowing. Part of the Speak Up
address, which is published on the Group’s intranet, for the purpose of whistleblowing.
No items have been notified to the Committee Chair prior to this report. Further information on
the Company whistleblowing arrangements is available on page 63.
Terms of Reference
The Committee has reviewed and approved the Terms of Reference, which are available on the
Company’s website, and were last reviewed and approved in December 2023. The Committee
will, at least annually, review its Terms of Reference to ensure they remain appropriate and robust.
Committee effectiveness review
The Board undertook a review of its own effectiveness which included the effectiveness of the
Committee. The Board and Committee will implement actions from the review during 2024.
Continuing education and training
The entire Board has received training on human rights, the impact of climate and climate
risk and the current Code, as well as training on its obligations with respect to the Listing
Rules, and regularly receives information and regulatory updates that could affect the work
of the Committee.
Strategic Report Corporate Governance Financial Statements106
EUROWAG Annual Report and Accounts 2023
Remuneration report
Remuneration report
Annual Statement
I am pleased to present Eurowag’s Directors’
Remuneration Report for 2023.
This year, the Directors’ Remuneration Report
comprises the following three sections:
@
This Annual Statement, where I summarise
the work of the Committee during 2023 and
our approach to Directors’ remuneration
@
A copy of the new Directors’ Remuneration
Policy (“Policy”), which will be subject to a
binding shareholder vote at the May 2024 AGM
@
The Annual Report on Remuneration, which
explains in more detail how Directors have
been paid in 2023 and, subject to its
approval, how we intend to implement the
new Policy in 2024
2023 business performance
Eurowag delivered a robust performance in
2023, despite the challenging macroeconomic
pressures such as reduced freight demand,
less kilometres driven, significant increases
in inflation and interest rates, thereby
demonstrating once again the inherent
resilience of our business model and the mission
critical nature of our services. At a headline
level, net revenue grew 34.4% to €256.5 million,
with adjusted EBITDA up 33.2% to €108.7 million,
supported by acquisitions and strong organic
growth. Adjusted EBITDA margins were
maintained at 42.4%, demonstrating the strong
profitability of the business. These results give
us a strong foundation from which to build as
we enter 2024 and beyond.
The business made significant strides in 2023
towards achieving its objective of delivering the
CRT industry’s first integrated digital platform.
As a result of our strategic M&A programme and
investment in digital transformation, Eurowag has
added both new geographies and data-centric
products, which bring many benefits to our
customers. Our heavy capital investment phase is
now complete, and we are focused on integrating
operations, technology and products, all aligning
to one integrated digital platform, which will
unlock further value and opportunities for
Eurowag and its customers. We also continued
to make great progress on inclusivity, reducing
direct GHG emissions and customer NPS.
You can find more information about Eurowag’s
activities and performance in 2023 in the Board
Chairman’s statement on page 2 and in the Chief
Executive Officer’s review on page 20.
Remuneration outcomes for 2023
The annual bonus for 2023 was based 70% on
Group adjusted EBITDA, 10% on number of
active trucks, 10% on ESG measures, and 10%
on a combination of customer NPS and
employee engagement.
@
The Group achieved an adjusted EBITDA of
€108.7 million in 2023, which was between
the threshold and maximum levels.
Consequently, a payout of 20% out of 70%
was awarded
@
The total number of active trucks stood at
256,778, also falling within the threshold and
maximum range. This performance level
resulted in a payout of 5% out of 10%
Sharon Baylay-Bell
Remuneration
Committee Chair
The Committee has undertaken a comprehensive review
of senior executive pay and is proposing changes to
better align pay with stakeholders’ interests.“
Strategic Report Corporate Governance Financial Statements 107
EUROWAG Annual Report and Accounts 2023
@
Our ESG measures included the percentage of women in
total management, customer greenhouse gas (“GHG”)
emissions and our direct emissions targets, and contributed
to a payout of 6% out of 10%
@
Our performance against the customer NPS and employee
engagement measures led to a payout of 5% out of 10%
The overall annual bonus outcome for 2023 was 36.0% of
maximum opportunity, comprising a 36.0% of salary cash bonus
and a 18.0% of salary deferred bonus, with deferral in cash for
the Chief Executive Officer and shares for the Chief Financial
was under notice at the start of 2023 and did not participate in
the 2023 annual bonus.
Performance Share Plan (“PSP”) award at admission. This award
was eligible to vest in October 2024 and was contingent on an
EBITDA per share measure for the year ended 31 December 2023.
The threshold of the EBITDA per share target was not achieved
and therefore this award will lapse.
The Remuneration Committee has carefully assessed the
bonus and PSP vesting outcomes and believes that they
accurately reflect performance over the relevant performance
periods. No discretion was exercised by the Remuneration
Committee to alter the formulaic outcomes.
Board changes
As set out in last year’s report, on 25 October 2022 we
as Chief Financial Officer and Board Director of the Company,
notice period and left the business on 30 April 2023. Despite
not receiving a payment in lieu of notice, she did receive a
non-compete-related payment as stipulated in her contract
instrumental in the success of our listing in 2021 and was
treated as a good leaver for incentive purposes, although the
performance criteria for her retained 2021 PSP award was not
met and therefore this award lapses.
Oskar Zahn joined as Chief Financial Officer on 17 April 2023 and
subsequently joined the Board on 12 May 2023. Mr Zahn forfeited
remuneration from his former employer and under our recruitment
policy and in-line with typical practice, he was compensated for
forfeited remuneration on a like-for-like basis in terms of time
vesting, value and performance. The buyout included a modest
estimate of his 2022 annual bonus, and buyout of his share
awards, some of which will vest based on service only and others
based on both service and Eurowag performance. Full details of
the compensatory awards are set out on page 118.
Our people
In 2022, the Company conducted two salary reviews for its
employees. The first review, effective from 1 September 2022,
resulted in an average salary increase of 8.5% for 222 of the
lowest-paid employees. The second review, effective from
1 January 2023, included all employees, and led to an average
base salary increase of 8.85%.
All our employees participate in an annual bonus scheme. Bonuses
for all employees except the sales teams will be paid in April 2024.
Review of senior executive pay and 2024
Policy approval
Context
Over the last few months, the Committee has undertaken a
comprehensive review of the reward framework in light of
Eurowag’s continued strategic progress, the growth aspirations
of the business and the challenges of retaining and attracting
talent against global tech businesses.
The main finding from the review is a lack of flexibility in our current
long-term incentive offering. More specifically, when seeking to
recruit global senior talent, it has become clear that offering a
single long-term incentive – performance shares – has become
restrictive and inhibits our growth plans.
In contrast, common practice in tech businesses and in
particular in Europe and the US is to grant both performance
shares and restricted shares. The opportunity of using hybrid
schemes is a theme that is currently being explored by The
Investment Association in 2024.
While below main Board employees are not bound by the Policy
and therefore could be granted both performance and
restricted shares, the Committee believes the Policy should
apply for participating Executive Directors so that all members
of the senior team are completely aligned and to avoid
divisiveness in participation and outcomes.
Proposed changes
The Committee has determined that a more appropriate
structure will be to grant a mix of performance shares and
restricted shares under a new Long-Term Incentive Plan
(“LTIP”). The awards under the LTIP will be made to Eurowag’s
senior team including the Chief Financial Officer but excluding
the Chief Executive Officer, who currently participates in the
annual bonus only.
Current Proposed
Award levels
Performance
share maximum
Performance
share maximum
Restricted
share maximum
Chief Financial
Officer 150% 75% 75%
It is proposed that there is no change to our overall maximum
percentage opportunity of 150% of salary earnings potential.
The Committee is aware, though, that the total expected value
of long-term incentives will be higher as restricted shares will
be subject to an underpin condition (see later) rather than
performance criteria. The Committee believes the proposed
award level is appropriate as it seeks to enhance the
competitiveness of packages through a higher long-term,
share-based component. The Committee had considered
whether it might be more appropriate to make material increases
to base salaries to enhance competitiveness. However, this
would have significantly increased fixed pay which the
Committee wishes to avoid. In contrast, the restricted share
quantum can be scaled back either at grant or at vesting
(including to nil) through testing of the underpin and taking
account of the prevailing share price and is therefore variable
in nature. Furthermore:
@
Restricted shares are long-term in nature (five years - vest
after three years, and subject to a two-year holding period)
Strategic Report Corporate Governance Financial Statements108
EUROWAG Annual Report and Accounts 2023
@
Restricted shares contain good and bad leaver provisions
and therefore cannot be banked unlike fixed pay
@
The value of restricted shares is directly related to the rise
and fall in share price
The Committee believes the mix of performance and restricted
shares better aligns our approach to our strategy, while
performance shares align executives with long-term
sustainable growth and returns and restricted shares provide
long-term stewardship of the share price. This approach will
enhance our ability to retain and attract tech talent to deliver
our ambitious strategic goals.
Oskar Zahn joined Eurowag in April 2023 and has made a very
significant contribution to Eurowag and has become a highly
regarded member of the Executive team. To further align him
with the future success of the Company, the Committee is
proposing to make Mr Zahn a one-off grant of restricted shares
in 2024 to the value of 100% of salary alongside his proposed
hybrid award. This will give Mr Zahn significant alignment with
the share price and retain him over the medium-term. The
awards will vest after three years subject to the achievement
of the 2024 restricted shares underpin. Vested awards will
have a two-year holding period attached.
Operation of the Policy in 2024
The Committee intends to operate the Policy as follows in the
current financial year.
@
Officer’s base salaries will not be increased in 2024. The Chief
Executive Officer’s and Chief Financial Officer’s salaries are
currently €321,000 per annum and £430,000 respectively
@
Financial Officer will participate in the 2024 annual bonus
plan, which aligns them with the financial and corporate
goals set by the Remuneration Committee which cascade
down the organisation. In accordance with the Policy, the Chief
Executive Officer’s and Chief Financial Officer’s bonus
opportunity will be set at 150% of their salary, with one-third
of any bonus deferred
@
Some revisions to the performance criteria are required in
2024 to better align our incentives with our one- and
three-year goals. The inclusion of an underpin for the
restricted share element of our LTIP ensures that awards
will not vest if there has been clear underperformance against
the key elements included in our underpin framework
The Committee considers that the rest of the Policy remains fit
for purpose and no other material changes are currently
required. The Policy is compliant with all corporate governance
guidelines and includes bonus deferral (at one-third of bonus
earned), malus and clawback provisions, shareholding guidelines
(during employment and post-cessation) and workforce aligned
pension provisions.
The Committee strongly believes that the proposed Policy
changes set out above are the best way to support the Group’s
strategic aims; it also allows us to retain and motivate the existing
management team whilst ensuring we remain focused on the
interests of shareholders.
I would like to thank our largest shareholders for their input
into the design of our proposed Directors’ Remuneration Policy
and hope you will be able to support this resolution, the usual
annual advisory resolution and the resolution to approve the
new LTIP at the May 2024 AGM. If you have any questions
or feedback on this report or our approach to remuneration,
please feel free to contact me via the Company Secretary at
Eurowag-UKCoSec@Computershare.co.uk.
Sharon Baylay-Bell
Chair of the Remuneration Committee
25 March 2024
Over the past year, we conducted a comprehensive review of
our incentive measures, making adjustments to our financial
objectives. 70% of the 2024 bonus will be based on financial
addition, 10% will be based on platform delivery and the
remaining 20% will be based on individual performance.
The Committee believes the revised measures provide an
appropriate focus on our key financial and non-financial
priorities due to the major transformation of the business from
a single product fuel card business to a technology platform
business. The targets remain commercially sensitive and will be
disclosed retrospectively in next year’s Remuneration Report.
@
participate in the 2024 LTIP. The Chief Financial Officer will
receive an award under the LTIP to the value of 75% of salary
in performance shares and 75% of salary in restricted shares,
subject to the approval of the 2024 Policy and the new LTIP
at the May 2024 AGM. He will also receive a one-off award of
details of the performance share measures and targets and
the restricted share underpin are set out in the Annual Report
on Remuneration
Concluding remarks
In summary, the Committee has concluded that:
@
The structure of pay packages should be amended to provide
greater flexibility through the grant of restricted shares
alongside performance shares. This hybrid award will provide
strategic alignment and greater stewardship of the share
price and help the Company retain and attract key talent in
the tech space. Restricted shares will also help to avoid
short-term decision making which is particularly important
in an acquisitive business, from a long-term perspective
@
The overall annual maximum long-term incentive opportunity
will remain unchanged but the rebalancing of opportunity
between performance and restricted shares will
help increase the overall competitiveness of packages
Remuneration report continued
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EUROWAG Annual Report and Accounts 2023
Directors’ Remuneration Policy
A new Directors’ Remuneration Policy will be put to a binding
shareholder vote at the May 2024 AGM and, subject to its
approval, will apply with effect from the date of the AGM and
apply for a period of three years. The Policy has been prepared
in accordance with the Large and Medium-sized Companies and
The Committee undertook a comprehensive review of the
Group’s Remuneration Policy for senior employees, including
the Executive Directors, to ensure that it was appropriate for a
global listed tech company. This took into account practice in
the UK, across Europe, and the US and in the tech sector and
recognised the various jurisdictions in which the Company’s
senior executives and employees work and reside. In
undertaking this review, the Remuneration Committee sought
independent, specialist advice. The members of the Committee
bring their experience to bear and had the opportunity to
discuss proposals without management present to ensure that
decisions are reached objectively and without inappropriate
influence. No person participates in decisions relating to their
personal remuneration.
The Directors’ Remuneration Policy was designed with the
following objectives in mind:
@
To attract, retain and motivate the Executive Directors and
senior employees, incorporating incentives that align with
and support the Group’s business strategy as it evolves,
and which align Executives to the creation of long-term
shareholder value
@
To continue to support the Group’s growth ambitions, with
a significant proportion of potential total remuneration to
be performance-related and delivered in awards of the
Company’s shares
@
To ensure that pay is competitive in the various markets
in which the Group operates and is sufficient to attract
and retain high calibre personnel in the global tech market
@
To encourage wider employee share ownership across
the business
@
To take into account good practice requirements in the UK,
incorporating the necessary structural features to ensure a
strong alignment to performance and delivery of strategic goals
The Remuneration Committee considered the six factors listed
in Provision 40 of the Code.
Clarity
The Policy is designed to be simple and support long-term,
sustainable performance. The Policy has been discussed
internally and is well understood by participants. The Policy
clearly sets out the limits in terms of quantum, an overview of
the performance measures that can be used and discretions
that could be applied if appropriate.
Simplicity
The Group’s arrangements are simple and include a market
standard annual bonus and a single LTIP under which performance
shares and restricted shares may be granted. There are no
complex or artificial structures required to deliver the Policy.
Risk
Appropriate individual limits and caps are set with appropriate
weighting on long-term performance to discourage any
inappropriate risk taking. The Committee retains discretions to
override formulaic outturns. When considering performance
measures and target ranges, the Committee will take account of
the associated risks and liaise with the Audit and Risk Committee
as necessary. The long-term nature of a large proportion of pay
(through annual bonus deferral, post-vesting holding periods and
post-cessation shareholding requirements) encourages a
long-term, sustainable mindset. Clawback and malus provisions
are in place across all incentive plans.
Predictability
The Policy contains appropriate caps for each component of
pay. The potential reward outcomes are easily quantifiable and
are set out in the illustrations provided in the Policy.
Performance can be reviewed at regular intervals to ensure
there are no surprises in outcomes at the end of the
performance period.
Proportionality
Incentive outcomes are contingent on successfully meeting
stretching performance targets, which are aligned to the
delivery of the Company’s strategy. The Committee retains
discretions to override formulaic outturns.
Alignment to culture
The Policy encourages performance delivery, which is aligned to
the culture within the business. However, this performance focus is
always considered within an acceptable risk profile. The measures
used in the variable incentive plans reflect business priorities and
are aligned across the Group.
Changes to the Directors’ Remuneration Policy
The main changes to the 2024 Policy are:
@
Pensions: Executive Directors’ pension contribution rates,
where provided, will be capped at the local workforce
contribution rate. The rate for UK employees has increased
from 7% to 8% and the Policy has been amended to reflect
this change
@
Long-term incentives: The previous PSP has been replaced
with the new LTIP. Under the LTIP, Executive Directors may
receive hybrid awards in the form of both performance
shares and restricted shares in any financial year, noting that
the 2022 Policy permitted performance share awards only.
The overall maximum opportunity in face value terms remains
unchanged at 150% of salary through limits of 75% of salary
each for performance shares and restricted shares.
Restricted shares will vest after three years subject to the
satisfaction of an underpin and continued service. Vested
LTIP awards, consistent with performance shares, will be
subject to a further two-year holding period. The Chief
Financial Officer will be granted a one-off award of restricted
shares in 2024 in addition to normal 2024 LTIP awards
@
Malus and clawback: Further detail has been provided on
provisions in-line with latest guidance
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Remuneration Policy for Executive Directors
The following table summarises each element of the Remuneration Policy for the Executive Directors, explaining how each element operates and links to the corporate strategy.
Base salary
Link to strategy Operation Maximum potential value Performance metrics
@
To provide a base level of
pay that helps us recruit,
retain and engage
high-calibre
Executive Directors
@
Recognises the knowledge,
skills and experience of the
individual and reflects the
scope and size of the role
@
Salaries are normally reviewed, but not necessarily increased,
annually with any changes usually effective from either
1 January or 1 April. An out of cycle review may be conducted
if the Committee determines it is appropriate
@
When setting base salaries, the Committee considers a
number of factors, including (but not limited to) the skills and
experience of the individual, the size and scope of the role,
the geography in which the role competes, salary increases
across the Group, and business performance as well as salary
levels for comparable roles in other similarly sized UK and
comparable companies
@
There is no maximum salary level
@
However, salary increases are
normally considered in relation
to the wider salary increases
across the Group
@
Above workforce increases
may be necessary in certain
circumstances, for example
when there has been a change
in role or responsibility or
where an Executive Director
has been appointed to the
Board on an initial salary
which is lower than the desired
market positioning
@
Individual performance, as well as the performance of
the Group, is taken into consideration as part of the annual
review process
Pension
Link to strategy Operation Maximum potential value Performance metrics
@
To provide cost-effective
retirement benefits
@
The Executive Directors may receive a pension contribution to
a Company pension scheme or in the form of a cash
allowance in lieu of pension
@
Pension contributions or allowances are normally paid
monthly and are not bonusable
@
Pension provision is no
more generous than any
applicable local
arrangements implemented
for other employees
@
Where provided, pension
contributions for Executive
Directors are capped at that of
the wider local workforce (which,
for UK employees, is 8% of salary)
@
Not applicable
Remuneration report continued
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Benefits
Link to strategy Operation Maximum potential value Performance metrics
@
To provide competitive,
cost-effective benefits,
which help to recruit and
retain Executive Directors
@
Benefits may include insurances such as life and accident
insurance, private medical and dental cover, a mobile
telephone, use of a company car or a car allowance, a fuel
card, travel allowances and other market standard benefits
provided across the Group from time to time
@
Other benefits, such as residency allowances, air travel
where located away from home, tax return preparation costs,
relocation expenses, tax equalisation, expatriate
arrangements or support in meeting specific related costs
incurred may be provided as necessary
@
Reasonable business-related expenses (including any tax
thereon if determined to be a taxable benefit) will be reimbursed
@
There is no specific maximum,
although it is not expected to
exceed a normal market level
@
The value of benefits will
vary based on the cost to
the Company of providing
the benefits
@
Not applicable
Annual bonus
Link to strategy Operation Maximum potential value Performance metrics
@
To incentivise and reward
for the delivery of annual
corporate targets aligned
to the business strategy
@
To align with
shareholders’ and wider
stakeholders’ interests
@
The annual bonus is subject to performance measures and
objectives set by the Committee for the financial year and
continued service
@
At the end of the performance period, the Committee
assesses the extent to which the performance targets have
been achieved and approves the final outcome
@
One-third of any bonus earned will be deferred in shares,
normally for three years under the Deferred Bonus Share Plan
(“DBSP”), in respect of which dividend equivalents may apply
to the extent such deferred awards vest
@
Malus and clawback provisions apply as set out on page 114
@
Bonus awards are payable at the Committee’s discretion
@
The annual bonus policy
maximum is 150% of base salary
@
The target annual bonus
opportunity is normally set at
50% of the maximum
@
The amount payable for
achieving threshold performance
is up to 25% of the maximum
@
If the threshold level is not
achieved, no payment will arise
for the portion of bonus against
that metric
@
The Committee will determine the relevant measures and
targets each year taking into account the key strategic
objectives at that time
@
Performance measures may include financial, strategic,
operational, ESG and/or personal objectives
@
The majority of the performance measures will be based on
financial performance
@
The Committee sets targets that are challenging, yet
realistic in the context of the business environment at the
time and by reference to internal business plans and
external consensus. Targets are set to ensure that there is
an appropriate level associated with achieving the top end
of the range but without encouraging inappropriate risk taking
@
The Remuneration Committee has the discretion to adjust
formulaic outcomes if the Committee believes that such
outcome is not a fair reflection of business and/or individual
performance, including consideration of shareholder and
broader stakeholder views
Strategic Report Corporate Governance Financial Statements112
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Long-term incentive
Link to strategy Operation Maximum potential value Performance metrics
@
To incentivise and
reward for the delivery
of long-term performance
and sustainable shareholder
value creation
@
To align with shareholders’
interests and to foster a
long-term ownership mindset
@
Under the LTIP, hybrid awards may be granted. Hybrid awards
comprise a mix of performance shares and restricted shares
in the form of nil/nominal cost options or conditional awards
@
Performance shares vest after no less than three years
subject to the satisfaction of performance criteria and
continued service
@
Restricted shares vest after no less than three years subject
to the satisfaction of an underpin and continued service
@
Vested performance share and restricted share awards are
subject to a further holding period applying at least until the
fifth anniversary of grant, during which they may not ordinarily
be sold (other than to pay relevant tax liabilities due)
@
Dividend equivalents may accrue over the period from grant
until the later of vesting and the expiry of any holding period
@
Malus and clawback provisions apply as set out on page 114
@
The maximum annual award is
75% of salary for performance
shares and 75% of salary for
restricted shares
@
In addition to the above grant
levels, the Chief Financial
Officer will receive an additional
one-off grant of restricted
shares during 2024 only to the
value of 100% of salary
@
The proportion of performance
shares which may vest for
threshold performance will be no
more than 25% of the maximum
award. If the threshold level is
not achieved, no vesting will
arise against that metric
Performance shares:
@
Performance conditions, weightings and target ranges will
be determined prior to grant each year to align with the
Company’s longer-term strategic priorities at that time
@
The measures which may be considered include financial
and shareholder value metrics, as well as strategic,
non-financial measures. The majority of the measures will
be based on financial and/or shareholder value metrics.
In normal circumstances, financial or shareholder value
measures will make up the majority of the long-term incentive
Restricted shares:
@
Restricted share awards will be subject to the satisfaction
of a performance underpin which considers the overall
performance of the business over the three-year
performance period. If the underpin is not achieved,
vesting will be reduced, including potentially down to nil,
at the discretion of the Committee
@
The Remuneration Committee has discretion under the LTIP,
in-line with the Code, to adjust the level of vesting that would
otherwise result (for example, that would otherwise result by
reference to formulaic outcomes alone). This discretion would
only be used in exceptional circumstances and may take into
account corporate and personal performance
All employee share plans
Link to strategy Operation Maximum potential value Performance metrics
@
To encourage wider share
ownership across all
employees, including the
Executive Directors
@
To align with shareholders’
interests and to foster a
long-term mindset
@
Executive Directors may participate in all employee schemes
on the same basis as other eligible employees
@
While no scheme is currently in place, the Policy permits
participation in a Share Incentive Plan, a Save As You Earn
(“SAYE”) scheme or any other all-employee share scheme if
introduced during the life of this Policy
@
Limits are in-line with those
set by HMRC
@
Not applicable
Remuneration report continued
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Shareholding requirements
Link to strategy Operation Maximum potential value Performance metrics
@
To align with shareholders’
interests and to foster a
long-term mindset
@
Executive Directors will normally be expected to retain
vested shares, net of sales to settle tax, until they have
met the required shareholding
@
Progress towards the guideline will be reviewed by the
Committee on an annual basis
@
The shareholding requirement will continue to apply for a
period of two years after termination of employment, with
the obligation being to retain the lower of the shareholding
requirement or those shares held towards the shareholding
requirement at the date of termination. The shareholding
requirement will halve upon the commencement of the
second year following termination
@
The shareholding requirement
for Executive Directors is 200%
of base salary
@
The equivalent net value of
unvested ordinary shares subject
to any awards held by an
Executive Director to which only
time-based vesting or a holding
period applies will count towards
the shareholding requirement
@
Not applicable
Fees policy for Chairman and Non-Executive Directors
The following table summarises the fees policy for the Chairman and the Non-Executive Directors.
Fees
Link to strategy Operation
Maximum
potential value
Performance
metrics
@
To provide a competitive
fee to attract Non-
Executive Directors who
have the requisite skills
and experience to oversee
the implementation of the
Company’s strategy
@
Fees for the Chairman are set by the Committee
@
Fees for the other Non-Executive Directors are set by the Board,
excluding the Non-Executive Directors
@
Fee levels are determined based on an estimate of the expected
time commitments of each role and by reference to comparable
fee levels in other companies of a similar size and complexity
@
Additional fees are payable to the Senior Independent Director
and Chairs of the Audit and Risk and Remuneration Committees (or
any other Committee operated by the Board), to reflect their
additional responsibilities and a fee is payable for acting as a
member of one or more of such Committees
@
Additional fees may be payable for additional
responsibilities such as ESG-related responsibilities
or for being the Non-Executive Director designated
for engagement with the workforce for the purposes
of the Code
@
Higher fees may be paid to a Non-Executive Director
should they be required to assume executive duties on
a temporary basis
@
The Non-Executive Directors and the Chairman are
not eligible to receive benefits and do not participate
in pension or incentive plans
@
Business expenses incurred in respect of their duties
including international travel and accommodation for
meetings (including any tax thereon) are reimbursed
@
Fees are
reviewed, but
not necessarily
increased,
annually. Fee
increases are
normally effective
from either
1 January or
1 April
@
There is no
maximum
fee level
@
Not applicable
Strategic Report Corporate Governance Financial Statements114
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Notes to the Policy table
Differences between Directors’ remuneration and employees’ pay
The key difference between senior executives’ pay and that of the workforce is participation in
variable pay schemes. Senior executive remuneration arrangements are more aligned to
Company performance due to the level of their business influence, with high focus on business
performance and shareholder alignment. For our employees, a significant factor in determining
remuneration is the individual’s performance with appropriate retention initiatives focusing on
high performers and key talent. Over half of our employees participate in an annual bonus
arrangement. Participation in the new LTIP and the existing below Board Employee Share Plan
(“ESP”) is limited to the most senior people and those with greater influence on Group
performance outcomes and the share price. The value of each element of the package that an
employee may receive will vary according to the employee’s seniority and level of responsibility.
Selection of performance measures and targets
The Remuneration Committee determines the performance measures applying to the annual
the time. The measures and their weightings may change from year to year to reflect the needs
of the business. Measures used may include financial (such as net revenue, adjusted EBITDA and
personal or individual objectives. The use of such measures is intended to ensure performance
is assessed on a rounded basis and is appropriately aligned to the Group’s KPIs. The targets for
both the annual bonus and LTIP performance shares are set after considering internal business
plans, economic forecasts and, to the extent it exists, external analyst consensus. The target
range is calibrated so that it is realistic yet requires stretching outperformance to achieve the
top end. Restricted shares granted under the LTIP are subject to an underpin assessment.
Malus and clawback
The incentive pay awards made by the Company are subject to provisions that allow it to recover
any value delivered (or which would otherwise be delivered) in connection with any variable
award including annual bonus, DBSP and PSP awards in exceptional circumstances, and where it
believes that the value of those variable pay awards is no longer appropriate.
The malus and clawback provisions can be used in the following circumstances:
@
A material misstatement
@
An error of calculation (including on account of inaccurate or misleading information)
@
An action or conduct that amounts to serious misconduct
@
An instance of corporate failure (e.g. administration or liquidation)
@
A significantly adverse impact on the Group’s reputation
Malus and clawback may be effected prior to the third anniversary of the vesting of an LTIP
award or prior to the third anniversary of the payment of a bonus or grant of deferred bonus
share award, as relevant.
Discretions retained by the Committee in operating the incentive plans
The Committee operates the Group’s incentive plans according to their respective rules and in
accordance with HMRC and listing rules where relevant. To ensure the efficient operation and
administration of these plans, the Committee may apply certain discretions. These include (but
are not limited to) the following:
@
Determining the participants in the plans
@
Determining the timing of grants and/or payments
@
Determining the size of grants and/or payments (within the limits set out in the Policy table)
@
Determining the appropriate choice of measures, weightings and targets for the incentive
plans from year to year including any use of discretion to amend the outcome, as appropriate
@
Determining good leaver status and the extent of vesting and or payment under the incentive plans
@
Determining the extent of vesting of awards under share-based plans in the event of a change
of control
@
Making any appropriate adjustments required in certain circumstances (e.g. rights issues,
corporate restructuring events, variation of capital and special dividends)
While performance conditions will generally remain unchanged once set, the Remuneration
Committee may vary the performance conditions applying to any award after it is granted if an
event occurs, which causes the Remuneration Committee to consider that it would be
appropriate to amend the performance conditions, provided the Remuneration Committee acts
fairly and reasonably in making the alteration and, in the case of awards to the Company’s
Executive Directors, the amended performance conditions are not materially more or less
challenging than the original conditions would have been but for the event in question.
Legacy arrangements
As set out in the Prospectus, the Company had various legacy share and cash arrangements
which may vest on their original terms post-IPO. This Policy gives authority to the Company to
honour any commitments entered with current Directors prior to the approval of this Policy and
prior to the Company’s admission or with internally promoted future Directors prior to their
appointment. Details of any payments under the legacy arrangements will be set out in future
Directors’ Remuneration Reports as they arise.
Statement of consideration of shareholder views
In considering the operation of the Policy, the Committee takes into account the published
remuneration guidelines and specific views of shareholders and proxy voting agencies.
Remuneration report continued
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The Committee will consider shareholder feedback received in relation to the AGM each year
and the reports from shareholder representative bodies more generally. The Committee
consulted with the Company’s largest shareholders when seeking changes to the Policy for
approval in 2024. Furthermore, the Committee will consider specific concerns or matters raised
at any time by shareholders on remuneration.
Statement of consideration of employment conditions elsewhere
in the Group
The views of senior executives were taken when drawing up the new Policy.
In considering rewards for Executive Directors and senior executives, the Committee has been
provided with an update of pay and employment conditions throughout the Group. This includes
details of base salary increases, bonus award levels, share scheme participation across the
Group workforce, as well as more information on salaries and proposed increase for the
Executive Committee and Senior Leadership Team. The Committee has reviewed and agreed all
grants of share awards. The 2023 Employee Engagement scores, which included workforce
feedback on executive and employee remuneration, were shared and reviewed with the
designated Non-Executive Director for employee engagement.
Recruitment of Executive Directors – approach to remuneration
The ongoing remuneration package for any new Executive Director will be set in accordance with
the terms of the Policy in place at the time of appointment. The principles, which will be applied,
are set out below:
@
Base salary – will be set at an appropriate level taking into account the skills and experience of
the individual, the criticality and nature of the role and the geography in which the role
competes or is recruited from. If the base salary is set below market on appointment to reflect
experience, there will be an expectation that subsequent increases may be above those of the
wider workforce to bring this into line with the desired level as the individual develops in the
role. In some cases, it may be necessary to set a new recruit’s salary above his or her
predecessor’s salary. The Committee is mindful that the Company should avoid paying more
than is necessary to recruit the desired candidate
@
Benefits – will be in-line with those offered to other employees in the same location and take
account of any local market norms. In addition, the Committee recognises that it may need to
meet certain relocation expenses, expatriate benefits, temporary accommodation and travel
expenses, as appropriate
@
Pension – will be in-line with that offered to local or wider workforce norms
@
Annual bonus – will be operated in-line with the terms set out in the Policy table (including the
maximum opportunity disclosed) and will be pro-rated in the year of joining to reflect the
period of service rendered during the financial year. Depending on the timing of the
appointment, it may be necessary for the Committee to use alternative performance measures
for the remainder of the initial performance period
@
opportunities disclosed. An award may be made shortly after appointment (assuming not in a
closed period)
@
Buy-out awards – the Committee may consider offering additional cash and/or share-based
elements to replace remuneration forfeited by an individual on leaving their previous
employment when it considers these are necessary to facilitate the appointment and in the
best interests of the Company and its shareholders. Any buy-out arrangements will be made
under the existing incentive plans or the relevant provision of the UKLA Listing Rules and
would, as far as possible, be delivered on a like-for-like basis taking account of the nature,
time horizons and any performance requirements attached to the awards forfeited
For an internal appointment, any variable pay element or benefit awarded in respect of the prior
role may be allowed to continue on its original terms. For the avoidance of doubt, this includes any
remuneration arrangements in place prior to the Company’s admission. On appointment of a new
Chairman of the Board or Non-Executive Director, the fees will be set taking into account the
experience and calibre of the individual and the prevailing rates of other Non-Executive Directors
in similar sized companies at the time.
Executive Directors’ service contracts
The service contracts for the Chief Executive Officer and Chief Financial Officer are terminable
by either party, with six months’ notice for the Chief Executive Officer and 12 months’ notice for
the Chief Financial Officer. Additionally, any contracts for newly appointed Executive Directors
will include equal notice in the future, capped at a maximum of 12 months. The specific date of
each service contract is recorded in the table below:
Date of service contract
Chief Executive Officer 7 September 2021
Chief Financial Officer 12 May 2023
Notes:
1. The Chief Executive Officer was appointed as Director of W.A.G payment solutions plc on 3 August 2021.
2. The Chief Financial Officer was appointed as Director of W.A.G payment solutions plc on 12 May 2023. Magdalena Barto
stepped off the Board on 30 April 2023.
Executive Directors’ service agreements are kept available for inspection at the Company’s
single alternative inspection location.
Executive Directors’ external appointments
Executive Directors may accept external appointments as Non-Executive Directors of other
companies with the specific approval of the Board in each case. Any fees payable will be
retained by the Executive Directors.
Strategic Report Corporate Governance Financial Statements116
EUROWAG Annual Report and Accounts 2023
Non-Executive Directors’ terms of appointment
The Non-Executive Directors do not have service contracts with the Company but instead have letters
of appointment. The appointments of each of the Independent Non-Executive Directors are for an
initial term of three years from the date of appointment, unless terminated earlier, until the conclusion
of the Company’s AGM occurring approximately three years from that date. The appointment of each
Independent Non-Executive Director is also subject to annual re-election at the Company AGM. The
date of appointment for each Non-Executive Director is shown in the table below.
Date of appointment
Paul Manduca 7 September 2021
Joseph Morgan Seigler 7 September 2021
Mirjana Blume 7 September 2021
Sharon Baylay-Bell 7 September 2021
Susan Hooper
1
7 September 2021
Steve Dryden 1 June 2023
Kevin Li Ying 1 March 2024
Sophie Krishnan 1 March 2024
Note:
1. Susan Hooper is stepping off the Board following the year end on 16 May 2024.
The Chairman’s appointment can be terminated with six months’ notice or, at the Company’s
discretion, immediately in exchange for a payment in lieu of notice. Additionally, the Company
reserves the right to terminate the Chairman’s appointment without compensation. Similarly,
a Non-Executive Director’s appointment requires one month’s notice for termination, but the
Company also has the authority to terminate it immediately without compensation.
Policy on payment for departure from office
On termination of an Executive Director’s service contract, the Committee will take into account the
departing Director’s duty to mitigate their loss when determining the amount of compensation. The
Committee’s policy is described below and will be implemented, taking into account the contractual
entitlements, the specific circumstances for the departure and the interests of shareholders:
@
Base salary, benefits and pension – if notice is served by either party, the Executive Director can
continue to receive base salary, benefits and pension for the duration of their notice period.
The Executive Director may be asked to perform their normal duties during their notice period, or
they may be put on garden leave. The Company may, at its sole discretion, terminate the contract
immediately, at any time after notice is served, by making a payment in lieu of notice equivalent
to base salary only, with any such payments being paid in monthly instalments over the remaining
notice period. The Executive Director will normally have a duty to seek alternative employment
and any outstanding payments will be subject to offset against earnings from any new role
@
Annual bonus – if an Executive Director ceases to be employed or is under notice of termination
for any reason prior to the date that a bonus is due to be paid, no bonus shall be payable. In
certain good leaver circumstances (death, injury or disability, redundancy, retirement, their office
or employment being in a company which ceases to be a Group member or for any other reason
if the Committee so decides), the Committee may determine that a bonus shall continue to be
paid at the normal time and the bonus will typically be subject to a time pro-rata reduction. Any
DBSP awards will lapse upon cessation, except in good leaver situations as set out above. In
such cases, awards will normally vest on their normal vesting dates but the Committee may
decide to vest awards upon cessation of employment. The Committee may apply a pro-rata
reduction if it decides it is appropriate to do so
@
PSP/LTIP awards – unvested performance share awards will lapse upon cessation. In certain
good leaver situations, performance shares will normally be retained by the individual for the
remainder of the vesting period and remain subject to the relevant performance conditions and
ordinarily subject to a pro-rata reduction for time. The Committee will retain discretion to assess
performance/underpins and allow awards to vest at an earlier date if considered appropriate.
Any outstanding SIP and/or SAYE awards will be treated in-line with HMRC regulations.
Disbursements, such as legal costs and outplacement fees, may be payable as appropriate.
The Committee retains the authority to settle any legal claims against the Company, if
considered to be in the best interests of shareholders
Illustration of the Policy
The chart below sets out the potential values of the remuneration package of the Executive
Directors for 2024 under various performance scenarios.
The chart is based on the following assumptions:
3,500
3,000
2,500
2000
1,500
1,000
500
0
Minimum On-target Maximum Max with
growth
Minimum On-target Maximum Max with
growth
€345
100%
59%
41%
42% 42%
58% 58%
100%
29%
20%
51%
22%
29%
49%
17%
24%
39%
20%
€586
€827 €827
€548
€1,877
€2,526
€3,144
Fixed Annual bonus Long-term incentive Share price growth
CEO CFO
€’000
Remuneration report continued
Strategic Report Corporate Governance Financial Statements 117
EUROWAG Annual Report and Accounts 2023
The Chief Executive Officer is paid in EUR and the Chief Financial Officer is paid in GBP. The
chart is shown in EUR and GBP amounts have been converted into EUR based on the full year
Minimum
Comprises the value of base salary, benefits and pension and assumes no payout under
incentive schemes. Salary represents annual salary as at 1 January 2024. The benefits values
have been estimated. The Chief Executive Officer does not participate in a pension scheme
and the Chief Financial Officer‘s pension contribution is 8% of base salary.
On target
Target performance comprises an annual bonus payout of 50% of maximum and, for the Chief
Financial Officer only, LTIP performance shares vesting at 25% of maximum and LTIP restricted
shares vesting at 100% of maximum, both with no share price appreciation.
Maximum
the Chief Executive Officer and Chief Financial Officer) and, for the Chief Financial Officer only,
full LTIP vesting (performance shares and restricted shares each at 75% of salary) and a one-off
award of restricted shares to the value of 100% of salary to be granted in 2024 only.
Maximum with growth
As per the maximum scenario, but with an assumed increase of 50% in the value of the Chief
Financial Officer’s LTIP and one-off award to give an indication of value from potential share
price appreciation.
Annual report on remuneration
This section of the Directors’ Remuneration Report describes the remuneration outcomes
for 2023 and how we intend to amend our new Policy. The Directors’ Remuneration Report
(excluding the Directors’ Remuneration Policy) is subject to an advisory shareholder vote at
the 2024 AGM.
Remuneration Committee roles and responsibilities
The Remuneration Committee assists the Board in determining its responsibilities in relation
to remuneration and employee engagement, including making recommendations to the Board
on the Company’s policy on executive remuneration, setting the overarching principles,
parameters and governance framework of the Company’s Remuneration Policy and determining
the individual remuneration and benefits package of each of the Company’s Executive Directors
and Senior Leadership Team.
Remuneration Committee members and meetings
The Committee currently comprises six Independent Non-Executive Directors:
@
@
Mirjana Blume
@
Susan Hooper (to 16 May 2024, when she steps off the Board)
@
@
@
@
During the year, Caroline Brown stepped off the Board and was no longer a member of the
Committee at the 2023 AGM on 11 May 2023. Steve Dryden became a member of the Committee
upon his appointment to the Board as a Non-Executive Director on 1 June 2023. Kevin Li Ying
and Sophie Krishnan became members of the Committee upon their appointment to the Board as
Non-Executive Directors on 1 March 2024.
The Board Chairman, the Chief Executive Officer, the Chief Financial Officer and the Chief
Human Resources Officer attend meetings by invitation to provide valuable input. However,
no Director plays any part in determining their own remuneration.
The Remuneration Committee is required to meet at least three times a year. The Terms of
Reference of the Remuneration Committee cover such issues as membership and the frequency
of meetings, as mentioned above, together with requirements for the quorum for and the right to
attend meetings, reporting responsibilities and the authority of the Remuneration Committee to
carry out its duties. Further details on the roles and responsibilities of the Committee are
disclosed in the Terms of Reference, which were updated with minor changes during the year
and can be found on the Company’s corporate website (https://investors.eurowag.com/).
Strategic Report Corporate Governance Financial Statements118
EUROWAG Annual Report and Accounts 2023
Key activities during the year
The Remuneration Committee held four meetings during 2023
and all members of the Remuneration Committee were present.
The Remuneration Committee undertook the following
activities in this period:
@
Agreed the 2023 base salaries for Executive Directors and
selected Senior Leadership Team members under the
Remuneration Committee’s remit
@
Determined the participants in the 2023 annual bonus and
PSP schemes and the related measures and targets, ensuring
incentives are aligned with Company culture
@
Approved the disclosures contained within the 2023
Directors’ Remuneration Report
@
Determined the appropriate treatment of new senior joiners
and leavers during the year, including the joining terms of the
new Chief Financial Officer and the cessation agreements
for the departed Chief Financial Officer
@
Received updates from the Committee’s independent advisor
on market practice and governance developments, including
an overview of the 2023 AGM season and proxy voting
agency guidelines
@
Received an interim update on the likely outcome of the
2023 annual bonus plan and inflight PSP awards
@
Undertook a review of the Directors’ Remuneration Policy
and approved changes to be voted on at the 2024 AGM
@
Undertook an initial consideration of performance measures
to apply to the 2024 annual bonus and LTIP schemes
@
Undertook a review of the remuneration of the Senior
Leadership Team below Board level
@
Reviewed and updated the Remuneration Committee’s
Terms of Reference
Independent advisor
Committee following a tender process. During the year, FIT assisted the Remuneration Committee on a range of subjects
including incentive arrangements for 2023, providing an overview of pay trends and governance and remuneration report
drafting and proposals for the proposed 2024 Policy. FIT is a signatory to the Remuneration Consultants’ Code of Conduct and
has confirmed to the Committee that it adheres in all respects to the terms of the Code. The fees for the advice provided to the
provided share plan technical services to the Company during the year but provides no other services to the Company and the
Committee is satisfied that it receives independent and objective advice.
Single total figure of remuneration (audited)
The single figure of total remuneration disclosures cover the 2023 financial year and the prior financial year.
EUR ’000 Salary/fees
5
6
Total fixed
remuneration
Annual
7
Long term
8
9
Total variable
remuneration
Total
remuneration
Executive Directors
Martin
2023 321 24 — 345 173 — — 173 518
2022 300 21 — 321 — — — — 321
Oskar Zahn
1
2023 316 9 25 350 171 — 467 638 988
2022 — — — — — — — — —
Magdalena
2
2023 130 6 — 136 — — — — 136
2022 390 29 — 419 220 586 — 806 1,225
Non-Executive Directors
10
Paul Manduca 2023 333 — — 333 — — — — 333
2022 340 — — 340 — — — — 340
Sharon
Baylay-Bell
2023 95 — — 95 — — — — 95
2022 88 — — 88 — — — — 88
Mirjana Blume 2023 93 — — 93 — — — — 93
2022 89 — — 89 — — — — 89
Joseph Morgan
Seigler
3
2023 — — — — — — — — —
2022 — — — — — — — — —
Susan Hooper 2023 92 — — 92 — — — — 92
2022 88 — — 88 — — — — 88
Steve Dryden
4
2023 62 — — 62 — — — — 62
2022 — — — — — — — — —
Caroline Brown
4
2023 29 — — 29 — — — — 29
2022 94 — — 94 — — — — 94
Remuneration report continued
Strategic Report Corporate Governance Financial Statements 119
EUROWAG Annual Report and Accounts 2023
Notes:
1. Oskar Zahn joined the Company on 17 April 2023 and joined the Board as Chief Financial Officer on 12 May 2023. His
remuneration reflects his period in service as a Board Director. Mr Zahn is paid in GBP and his remuneration has been
converted to Euros at a rate of 0.870. In addition, as Mr Zahn joined the company on 17 April 2023, a month before being
appointed Director on 12 May 2023, for that earlier period he received remuneration totalling €29,418 in salary, €1,003 in
benefits, €2,353 in pension, and an annual bonus of €15,886, which includes the bonus deferral.
service during 2023.
3. Joseph Morgan Seigler was appointed to the Board by TA Associates. He does not receive a fee for his services.
4. Steve Dryden joined as a Non-Executive Director on 1 June 2023 and Caroline Brown stepped down as a Non-Executive
Director on 11 May 2023. Their remuneration reflects the period served on the Board during the year.
5. Benefits for Executive Directors consisted of life insurance, private medical and dental insurance, residency allowance,
air travel, reimbursement of tax return preparation costs, use of company car, fuel card and travel allowances.
Oskar Zahn received a pension contribution as a cash allowance to the value of 8% of base salary in lieu.
of maximum. Oskar Zahn’s bonus was pro-rated to reflect the period of the year he was on the Board as Chief Financial
of the 2022 bonus in the amount of €73,433, which was not included in 2022 Annual Report and Accounts.
based on performance for the year ended 31 December 2023. The threshold target was not achieved and therefore this
April 2023 and were shown in last year’s single total figure of remuneration table based on an estimated share price using
and the 2022 figure has been updated to reflect this.
9. Oskar Zahn joined Eurowag on 17 April 2023 and became a Board Director on 12 May 2023. He received buyout awards to
compensate him for remuneration forfeited at his previous employer. This included share awards which vest subject to
service only and others based on both service and performance – full details of the awards granted to Mr Zahn are shown
on page 120. The 2023 “Other” figure shows the value of Awards I, II and III based on their face values at the time of grant
(as they are not subject to performance) and the value of Award IV which was based performance to 31 December 2023.
a cash sum of €57,000 to compensate him for the forfeited 2022 bonus.
10. Non-Executive Directors are paid in GBP and their remuneration has been converted to Euros at a rate of 0.870.
2023 annual bonus outcome (audited)
The 2023 annual bonus was based on the achievement of Group measures, split between
to the number of active trucks, diversity, customer and direct GHG emissions, customer NPS
and employee engagement.
Targets and performance
Performance measure
Threshold
Max
payable) Actual 2023
Bonus outcome
for each
element)
Bonus earned
maximum)
Adjusted
103.2 129.1 108.7 29% 20%
No. of active
240.0 280.0 256.8 48% 5%
Inclusive recruitment and
32% 36% 34.6% 69% 3%
Reducing customer GHG
3% 5% 0.5% 0% 0%
Reducing direct
4% 6% 11% 100% 3%
35 39 41.8 100% 5%
68 72 60 0% 0%
Total bonus
36% of
maximum
Adjusted EBITDA for 2023 was €108.7 million, which included a contribution from the Inelo
acquisition. This resulted in 29.0% of this part of the bonus being achieved.
Number of active trucks for 2023 was 256,778, which included a contribution from the Inelo
acquisition. This resulted in 48.0% of this part of the bonus being achieved.
Inclusive recruitment and employment measured by percentage of women in total management
for 2023 was 34.6%, which included a contribution from the Inelo acquisition. This resulted in
69.0% of this part of the bonus being achieved.
Reducing customer GHG emissions for 2023 was 0.5%. This resulted in none of this part of the
bonus being achieved.
Reducing direct GHG emissions for 2023 was 11.0%. This resulted in 100% of this part of the
bonus being achieved.
Group customer NPS for 2023 was 41.8. This resulted in 100% of this part of the bonus being achieved.
Employee engagement for 2023 was 60.0, which included a participation from Inelo. This
resulted in none of this part of the bonus being achieved.
The total bonus payout was 36.0% of the maximum opportunity, or 54% of base salary.
The Committee considered the formulaic outturn in the context of wider Company and individual
performance and felt that the result was warranted. Therefore, no discretion was used to alter
the outturn.
Strategic Report Corporate Governance Financial Statements120
EUROWAG Annual Report and Accounts 2023
Martin Vohnka and Oskar Zahn’s bonus opportunity for 2023 was 150% of base salary.
Total bonus
€172,911 €115,274 €57,637
Oskar Zahn €170,523 €113,682 €56,841
Note:
1. Mr Zahn is paid in GBP and his remuneration has been converted to Euros at a rate of 0.870.
Oskar Zahn’s bonus reflects his period of service during the year. One-third of the bonus is
shareholding in the business and Oskar Zahn’s bonus will be deferred in shares.
2021 PSP award vesting (audited)
The first PSP awards were granted upon admission on 13 October 2021 and these were subject
to an adjusted EBITDA per share measure for the financial year ended 31 December 2023.
executives.
Adjusted EBITDA/
share for the
year ended
Actual
performance
Vesting
0% 13.27 cents 0% vesting
25% 13.79 cents
100%
Note:
1. Adjusted EBITDA per share excluding the Inelo acquisition.
Adjusted EBITDA per share for 2023 was below the threshold and therefore these awards will lapse.
Chief Financial Officer buyout and PSP awards granted in
2023 (audited)
Grant of buyout awards
On 28 February 2023, Eurowag announced the appointment of Oskar Zahn as Chief Financial
Officer with effect from 17 April 2023 and as an Executive Director on 12 May 2023. Mr Zahn
joined from a FTSE-listed business and, in recognition of remuneration forfeited upon leaving his
former employer, the Committee approved buyout awards to compensate him.
The buyout awards were granted in accordance with our Policy as nominal cost options, ensuring
that replacement awards were provided on a like-for-like basis. Considerations included the
nature of the award (shares/cash), performance requirements and time horizons. The grants were
executed on 20 April 2023 under a one-off arrangement within the Company’s ESP, comprising
five distinct awards, as follows:
Award Related to
Normal
vesting date
Number
of shares
under
1
Face value
of awards
Award I Restricted shares that vest based on time 10 May 2026 37,689 £29,473
Award II Restricted shares that vest based on time 8 March 2027 45,240 £35,378
Award III Deferred bonus award that vest based on time 8 March 2024 79,233 £61,690
Award IV
2
LTIP award which vests subject to time and
relative TSR performance to 31 December 2023
10 May 2024 251,391 £196,588
Award V
3
LTIP award which vests subject to time
8 March 2025 362,017 £283,097
Notes:
1. Awards were granted in the form of nominal cost options based on a share price of 78.2 pence, the closing share price on
27 February 2023, being the date prior to the announcement of the participant’s appointment as Chief Financial Officer.
2. It was originally intended that Award IV would be subject to the measures and targets applying to Eurowag’s PSP awards
granted at the time of admission in 2021. However, given: (i) the significant period of time that had elapsed between the
start of the performance period and the time of Mr Zahn joining the Board relative to the three-year performance period;
and (ii) the inherent nil value assigned to these awards prior to Mr Zahn’s joining, it was felt fairer and more appropriate for
these awards to be based on relative TSR measured from the date of Mr Zahn’s announcement date to 31 December 2023.
This ensured that the principle of performance was applied and that the outcomes are based on Mr Zahn’s contribution to
the business (rather than performance prior to his joining).
3. These awards are subject to the same measures as apply to the 2022 PSP awards, with 60% based on EPS and 40% on TSR.
Vesting of buyout, Award IV
Vesting
Relative TSR ranking versus FTSE
250, excluding investment trusts Actual performance
0% Below median
Company in the upper quartile of the
100% vesting 25% Median
100% Upper quartile or higher
Eurowag’s TSR performance over the period was 16.1%, which ranked the Company in the upper
quartile. Accordingly, Award IV will vest in full on 10 May 2024. The estimated value of this
tranche of the buyout award has been included in the single figure table using the three-month
average share price to 31 December 2023 alongside the grant values of Awards I, II and III which
are not subject to performance criteria.
PSP award granted in 2023 (audited)
In addition, reflecting his appointment early in 2023, Mr Zahn was granted an award on
Date of grant
No. of awards
granted
Share price
on grant
Face value
of award
Award as a
% of salary Vesting date
Oskar Zahn
20 April
2023
682,395 nominal
cost options 95p £645,000 150%
20 April
2026
Remuneration report continued
Strategic Report Corporate Governance Financial Statements 121
EUROWAG Annual Report and Accounts 2023
The performance share award will vest on the third anniversary of its grant, contingent upon
Mr Zahn’s continued service and the extent to which the performance share award’s
performance conditions (described below) are met.
The performance vesting of a distinct 60% of the performance share award (the “EPS Part”) will
be contingent upon the Company’s adjusted basic earnings per share for its financial year ending
2025 equals 11.5 cents. Full vesting of the EPS Part shall apply if adjusted basic EPS 2025 is
14.24 cents or higher. Pro-rata vesting of the EPS Part shall apply between these targets.
The performance vesting of 40% of the performance share award (the “TSR Part”) will be
contingent upon the Company’s total shareholder return (“TSR”) performance over the
performance period, 1 January 2023 to 31 December 2025. This performance will be evaluated
relative to the TSR performance (over the same period) of a comparator group of companies
- the constituents of the FTSE 250 Index (excluding investment trusts) as at the start of the
performance period.
EPS for FY 2025
Relative TSR ranking versus FTSE
250 excluding Investment Trusts
0% Below median
25% 11.50 cents Median
100% 14.24 cents or higher Upper quartile or higher
Payments for loss of office and to former Directors (audited)
Financial Officer and as a Board Director of the Company to pursue other interests.
During this period she continued to receive her base salary and benefits, and as she fulfilled her
entire notice period, no payment in lieu of notice was made.
this bonus will vest on their normal vesting date.
in the 2021 PSP which was contingent on EBITDA/share performance for the year ended
31 December 2023 lapsed due to threshold not being achieved.
In accordance with Czech law and her service agreement which was entered into prior to listing,
to the value of €266,000. Additionally, she was provided with a discounted buy-out of a company
Share interests and incentives (audited)
Shares owned
outright as at
31 December
2023
Vested but
unexercised
options
Options
unvested and
subject to
performance
conditions
Options
unvested and
not subject to
performance
conditions
Shareholding
as a
percentage
of salary
Shareholding
requirement
met
Executive Directors
1
329,195,021 — — — 106,123% YES
Oskar Zahn
2
— 79,233 1,044,412 334,320 46% NO
3
761,455 — 171,837 68,568 218% YES
Non-Executive Directors
Paul Manduca 150,000 — — — — —
Joseph Morgan
Seigler — — — — — —
Mirjana Blume 13,913 — — — — —
Caroline Brown
4
— — — — — —
Sharon Baylay-Bell 35,000 — — — — —
Susan Hooper — — — — — —
Steve Dryden
4
— — — — — —
Notes:
2. Oskar Zahn’s shareholding comprises the net of tax value of vested but unexercised options and options unvested which
are not subject to any performance requirements.
date of cessation.
4. Steve Dryden joined as a Non-Executive Director on 1 June 2023 and Caroline Brown stepped down as a Non-Executive
Director on 11 May 2023.
The shareholding as a percentage of salary is based on shares owned outright and the net of tax
number of other awards which are not subject to ongoing performance conditions. The middle
market share price at the close of business on 31 December 2023 was £0.90 and the range of the
middle market price from 1 January 2023 until 31 December 2023 was £0.737 to £1.03. Since the
year end to the date of signing off this report there have been no changes in the shareholdings
shown in the table above.
Strategic Report Corporate Governance Financial Statements122
EUROWAG Annual Report and Accounts 2023
Relative importance of spend on pay
The following table shows the Company’s expenditure on remuneration for all employees globally
as well as distributions to shareholders and adjusted EBITDA delivered, which the Committee
believes is a useful additional disclosure. The table below shows the year-on-year change
between 2023 and 2022.
2023 2022 % change
Overall expenditure on pay €111.1m €79.3m 40%
Dividends n/a n/a n/a
Adjusted EBITDA €108.7m €81.6m 33%
Adjusted EBITDA is as shown in the Annual Report disclosures in Note 11 of the Financial statements
and has been shown here because it represents a key financial metric for the Company.
Percentage change in Directors’ remuneration and employee pay
The following table shows the percentage change in each Executive and Non-Executive
Director’s remuneration compared with the average change for all employees of the Company
for the year ended 31 December 2023. In calculating the percentage change, remuneration
figures have been annualised to provide a better and more meaningful comparison.
2023 2022
Salary/fee
Taxable
benefits
Annual
bonus Salary/fee
Taxable
benefits
Annual
bonus
7% 9.2% n/a 0% 8.1% n/a
Oskar Zahn
1
n/a n/a n/a n/a n/a n/a
2
0% (13.6)% n/a 0%
Paul Manduca 0% n/a n/a 0% n/a n/a
Joseph Morgan Seigler n/a n/a n/a n/a n/a n/a
Mirjana Blume 6.6% n/a n/a 0% n/a n/a
Caroline Brown
3
0% n/a n/a 0% n/a n/a
Sharon Baylay-Bell 10% n/a n/a 0% n/a n/a
Susan Hooper 6.6% n/a n/a 15.3% n/a n/a
Steve Dryden
4
n/a n/a n/a n/a n/a n/a
All employees (2.1)% 9.2% (4.3)% 8.0%
Notes:
1. Oskar Zahn joined the Board on 12 May 2023.
3. Caroline Brown stepped down from the Board on 11 May 2023.
4. Steve Dryden joined the Board on 1 June 2023.
5. Changes in remuneration are based on the currency in which Directors are paid, to remove the impact of currency movements.
Performance graph against FTSE 250
The chart below shows the value of £100 invested in the Company on IPO compared with the
value of £100 invested in the FTSE 250 Index at the same date and the movement in value until
31 December 2023. We have chosen the FTSE 250 Index as Eurowag is a constituent of the
index and it provides the most appropriate and widely recognised index for benchmarking the
Company’s corporate performance since IPO.
CEO single figure history
Chief Executive Officer single figure history 2021 2022 2023
134 321 518
Annual bonus as % of max n/a n/a 36%
PSP shares vesting as % of max n/a n/a n/a
The Chief Executive Officer did not participate in the annual bonus in 2021 or 2022 and has
not received any long-term incentive awards. He participated in the 2023 annual bonus.
The Chief Executive Officer’s total remuneration for 2023 is as set out in the single figure of total
remuneration table on page 118. The Chief Executive Officer’s total remuneration for 2022 is
based on fixed pay received during the 2022 financial year. The Chief Executive Officer’s total
remuneration for 2021 is based on the period between incorporation and 31 December 2021.
Chief Executive Officer pay ratio
The Company has fewer than 250 UK employees and, therefore, has no statutory requirement
to publish a Chief Executive Officer pay ratio. The Committee will continue to review the
appropriateness of publishing pay ratios in the future.
120
100
80
60
40
20
0
W A G Payment Solutions FTSE 250 Index
Source: Datastream (a Refinitiv product).
Total Shareholder Return
(value of 100 unit investment made at admission)
7 Oct
2021
31 Dec
2021
31 Dec
2022
31 Dec
2023
Remuneration report continued
Strategic Report Corporate Governance Financial Statements 123
EUROWAG Annual Report and Accounts 2023
Statement of shareholding voting
At the AGM held on 11 May 2023, there was an advisory vote on the Directors’ Remuneration
Report and, at the AGM held on 26 May 2022, there was a binding vote on the Directors’
Remuneration Policy. The voting outcomes are set out in the table below.
Votes for %
Votes
against %
Votes
withheld %
Approval of the
Directors’
Remuneration Policy
598,900,680 100.00% 1,925 0% 0 0%
Approval of the
Directors’
Remuneration
590,773,551 99.86% 823,021 0.14% 0 0%
The Remuneration Committee was pleased with the high level of support received.
Implementation of Policy in FY 2024
Component
of pay Implementation for 2024
Base salaries
There will be no change to the Chief Executive Officer and Chief Financial
Officer’s base salaries in 2024. These are:
Chief Executive Officer: €321,000/Chief Financial Officer: £430,000.
Salaries will not be increased in 2024 and employee increases will be
determined and be effective from 1 April 2024.
Benefits and
pension
The Chief Executive Officer does not receive any pension contributions
or allowance in lieu.
The Chief Financial Officer’s pension contribution rate will be set at 8%
of salary, which is in-line with the UK pension contribution rate.
There are no material changes to benefit provisions.
Component
of pay Implementation for 2024
Annual bonus
The Chief Executive Officer and Chief Financial Officer will participate in the 2023
annual bonus scheme. The maximum opportunity will be 150% of base salary.
One-third of any bonus earned will be deferred for a period of three years in
the form of cash for the Chief Executive Officer and in shares for the Chief
Financial Officer.
The 2024 bonus will be subject to the following performance conditions:
Financial (70%):
@
@
@
@
Non-financial objectives (30%):
@
@
For 2024, net revenue, net debt leverage and capex have been included as
these are key short-term financial goals for the business which are aligned
to our transformation. This also provides a more rounded assessment of
financial delivery.
For the first time, we are now able to incorporate personal objectives which
are tailored to each senior executive. This uses our new performance appraisal
system which has been introduced for all employees.
The non-financial objectives include a key strategic goal related to the major
transformation of the business from a single product fuel card business to a
technology platform business.
The target ranges are not disclosed prospectively as they are commercially
sensitive, but will be reported in next year’s Remuneration Report.
Strategic Report Corporate Governance Financial Statements124
EUROWAG Annual Report and Accounts 2023
Component
of pay Implementation for 2024
LTIP -
performance
shares and
restricted shares
Under the proposed Policy, which is subject to a shareholder vote at the 2024
AGM, it is proposed that awards of performance shares and restricted shares
are granted under a hybrid structure.
The Chief Executive Officer will not receive a PSP award in 2024 and it is
anticipated that the Chief Financial Officer will receive the following awards:
@
@
60% of the performance shares award will be based on adjusted basic
@
to the 2025 financial year. None of this part of the award will vest if the
2026 adjusted EPS is less than 7.9 cents; 25% of this part of the award will
vest for adjusted EPS of 7.9 cents and there will be full vesting for 8.3 cents
or higher
@
median ranking; for a median ranking of 25% of this part of the award will
vest, rising on a straight-line basis to full vesting for upper quartile ranking
or higher. In addition, the Chief Financial Officer will receive a one-off
award of restricted shares in 2024 with a face value of 100% of base salary.
salary) will vest after three years subject to the assessment of an underpin.
Vested awards will be subject to a further two-year holding period. The
restricted share awards will vest subject to the achievement of an underpin.
If the underpin is not achieved, the Committee may scale back vesting
accordingly (including to nil). The performance underpin framework ensures
that awards will not vest if there has been clear underperformance against
the key elements included in the framework. For the 2024 restricted share
awards, the proposed underpin framework to be measured over the period
Component
of pay Implementation for 2024
@
Financial health of the business taking into account revenue growth,
operating margin, adjusted EPS, return on capital, cash conversion and
balance sheet strength
@
Strategic priorities – delivery of key strategic objectives over the vesting
period including operation and individual performance
@
Stakeholder experience – consideration of our key stakeholders including
employees, customers, suppliers and shareholders
@
ESG progress – progress towards our key environmental and social goals
NED fees
The Board Chairman fee is unchanged and NED fees have been increased for
2024 as follows:
Board Chairman fee: £290,000
Non-Executive Director base fee: £64,800
Senior Independent Director fee: £11,000
Audit and Risk Committee Chair fee: £25,000
Remuneration Committee Chair fee: £20,000
Designated ESG Director additional fee: £10,000
Member of Audit, Nomination or Remuneration Committees: £5,000
The increases and, in particular, those applying to chairing of Committees reflect the increased
time commitment involved.
On behalf of the Board
Sharon Baylay-Bell
Chair of the Remuneration Committee
25 March 2024
Remuneration report continued
Strategic Report Corporate Governance Financial Statements 125
EUROWAG Annual Report and Accounts 2023
Directors’ report
The Directors present the Annual Report, together with the audited consolidated financial
statements for the year ended 31 December 2023. The Directors’ Report, together with the
Strategic Report on pages 01 to 76, represents the management report for the purposes of
compliance with the Disclosure Guidance and Transparency Rules 4.1.R.
Corporate governance statement
The information that fulfils the requirements of the corporate governance statement for the
purposes of the FCA’s Disclosure Guidance and Transparency Rules can be found in the
corporate governance information on pages 84 to 92 (all of which forms part of the Directors’
Report), the wider Corporate Governance Report and this Directors’ Report.
Articles of Association and powers of the Directors
The Company’s Articles contain the rules relating to the powers of the Company’s Directors and their
appointment and replacement mechanisms. The Articles may only be amended by special resolution
at a General Meeting of the shareholders. The Articles provide that the business of the Company
shall be managed by the Board, which may exercise all the powers of the Company, subject to the
Statutes, these Articles and any special resolutions of the Company. The Articles can be found at:
https://investors.eurowag.com/application/files/7016/7715/5498/articles-of-association.pdf.
Directors
As at the date of this report, the Board is comprised of two Executive Directors, seven Independent
Non-Executive Directors and one Non-Independent Non-Executive Director (the Nominee Director
- further information is provided on page 80 of this report).
Financial Officer on 30 April 2023, which was followed by Oskar Zahn being appointed as Chief
Financial Officer on 12 May 2023. On 11 May 2023, Caroline Brown stepped down as a Director, which
was followed by Steve Dryden being appointed as a Director on 1 June 2023. On 1 March 2024,
Sophie Krishnan and Kevin Li Ying were each appointed as Directors. On 7 February 2024, it was
announced that Susan Hooper would resign as a Director, following the AGM of the Company to
be held on 16 May 2024. Further details on each of the Directors appointed can be found on
page 80 of this report. Further details on the Director’s skills and the Company’s succession
planning can be found on pages 94 and 95 of the Nomination and Governance Committee Report.
During the year, an assessment of the independence of the Chairman of the Board and each of
the Independent Non-Executive Directors was carried out, following the relevant independence
parameters provided for within the Code. The Company considers all Independent Non-Executive
Directors, as well as the Chairman, Paul Manduca, to be independent upon appointment and free
from any business or other relationship that could materially interfere with the exercise of their
independent judgement. The independence of the Directors will continue to be assessed
annually during the Board evaluation process. In accordance with the Code, Mirjana Blume is the
Senior Independent Director and acts as a sounding board for the Chairman and an intermediary
for the other Non-Executive Directors and should lead the annual evaluation of the Chairman.
GHG emissions
The information relevant to climate disclosures, including the Company’s TCFD statement, 2030
climate target and emissions data, is outlined on page 51. This includes information about the
Company’s total energy consumption in its operations, Scope 1 and Scope 2 emissions and GHG
3 emissions as well as information on the material categories for Scope 3 emissions based on
2020 data. Information on climate risks is included in both the Principal risks section as well as
the TCFD disclosures.
Disclosure of information to Auditors
The Directors confirm that, so far as they are each aware, there is no relevant audit information
of which the Company’s External Auditors are unaware. Each Director has taken all the steps that
they ought to have taken as a Director to make themselves aware of any relevant audit
information and to establish that the Company’s External Auditors are aware of that information.
Directors’ indemnities
In pursuing their duties, the Directors have the benefit of indemnity provisions contained within
the Company’s Articles. The Company has additionally purchased and maintained Directors’ and
Officers’ liability insurance to provide further protections for the Directors. The Directors are able
to obtain legal or other relevant advice at the expense of the Company in their capacity as
Directors. The Company provided a qualifying third-party indemnity to each Director as
permitted by Section 234 of the Companies Act 2006 and by the Articles for the full financial
year and which remain in force at the date of this report.
Conflicts of interest
The Directors have declared any conflict or potential conflict of interest to the Board, which has
the authority to approve such situations. A conflicts of interest register is maintained on an
ongoing basis and reviewed annually. The Directors advise the Board as soon as they become
aware of any conflict of interest. When a Director has a relevant conflict of interest, they are
recused from discussions or decisions on the matter on which they are conflicted.
Directors’ report
Strategic Report Corporate Governance Financial Statements126
EUROWAG Annual Report and Accounts 2023
Political and charity donations
The Company’s policy is that it does not, directly or through any subsidiary, make what are
commonly regarded as donations to any political party. However, the Companies Act 2006
(the “Act”) defines political donations very broadly and so it is possible that normal business
activities, such as sponsorship, subscriptions, payment of expenses, paid leave for employees
fulfilling certain public duties, and support for bodies representing the business community in
policy review or reform, which might not be thought of as political expenditure in the usual sense,
could be captured. Activities of this nature would not be thought of as political donations in the
ordinary sense of those words.
The resolution to be proposed at the 2024 AGM, authorising political donations and expenditure,
is to ensure that the Group does not commit any technical breach of the Act. At the AGM of the
Company held on 11 May 2023, shareholders voted to allow the Company to incur political
expenditure up to a maximum aggregate amount of £100,000 in-line with market practice.
That authority is due to expire at the AGM due to be held on 16 May 2024 and, therefore, the
Company will seek to renew the authority in-line with the above considerations.
Major interests in shares
As at 31 December 2023, and in accordance with Rule 5 of the FCA’s Disclosure and
Transparency Rules, the following table sets out the major shareholdings notified to the
Company by holders of notifiable interests.
As at 31 December 2023
Name of shareholder
Number of
ordinary shares
Percentage of
issued ordinary
shares
Couverina Business s.r.o
1
193,419,103 28.05
Bock Capital Investors
2
179,505,764 26.04
3
135,775,918 19.69
Columbia Threadneedle Investments 22,620,792 3.28
JPMorgan Securities collateral account 22,175,787 3.22
Notes:
2. A vehicle affiliated with Bock Capital EU Luxembourg WAG S.à.r.l., a vehicle associated with TA Associates.
31 December 2023.
Since 31 December 2023 to the date of this report, the Company has not been informed of any
notifiable changes with respect of the shares.
Share capital structure
As at 31 December 2023 and at the date of this report, the issued share capital of the Company
comprised 689,471,537 ordinary shares of £0.01 each admitted to the London Stock Exchange.
The ordinary shares have attached to them full voting, dividend and capital distribution
(including winding up) rights.
Authority to purchase own shares
At the Company’s AGM held on 11 May 2023, shareholders passed a resolution allowing the
Company to make market purchases of ordinary shares of £0.01 each in the capital of the
Company up to a maximum aggregate amount of 10% of the Company’s issued share capital.
No shares have been purchased under this authority as at the date of this report. This authority
is due to expire at the AGM to be held on 16 May 2024. The Board will seek to renew the
authority to make market purchases of the Company’s ordinary shares at this year’s AGM.
Principal shareholder and relationship agreement
In connection with, and effective from, admission, relationship agreements were entered into
following admission, the Company was able to operate independently of the aforementioned
parties for the purposes of the Listing Rules.
Relationship agreement with Martin Vohánka and Couverina
(i) conduct all transactions and arrangements with any member of the Company and the Group
at arm’s length and on normal commercial terms; (ii) not take any action which would have the
effect of preventing the Company from complying with its obligations under the Listing Rules;
and (iii) not propose or procure the proposal of any shareholder resolution which is intended or
appears to be intended to circumvent the proper application of the Listing Rules. Subject to
Non-Executive Directors to the Board, while together with their associates’ shareholding in the
Company are greater than or equal to 25% of the votes available to be cast at General Meetings
of the Company; and (ii) to nominate for appointment one Non-Executive Director to the Board,
while together with their associates’ shareholding in the Company are greater than or equal to
and currently have expressed that they do not intend to exercise these rights while Martin
Director for so long as he is an Executive Director of the Company, but that for so long as he is
Director of the Company. The relationship agreement additionally governs information flow
Directors’ report continued
Strategic Report Corporate Governance Financial Statements 127
EUROWAG Annual Report and Accounts 2023
concert parties (as defined in the City Code on Takeovers and Mergers (the “City Code”)) holds
in aggregate an interest in 30% or more of the aggregate voting rights in the Company and
subject, where necessary, to the prior consent of the Panel, the Company has undertaken to
procure that at the first AGM of the Company, and thereafter once in every calendar year, to
propose to its independent shareholders a resolution to waive, in accordance with Appendix 1
to the City Code, all obligations of the relevant shareholder (or its concert parties) to make a
general offer for the ordinary shares of the Company in accordance with Rule 9 of the City Code
that may otherwise arise as result of the Company purchasing or effecting any other transactions
in relation to the ordinary shares or related securities.
Relationship agreement with TA Associates
The TA relationship agreement contains substantially the same terms as the relationship
rights, which provide Bock Capital EU Luxembourg WAG S.à.r.l. (“Bock”) with the right to appoint
one Non-Executive Director to the Board, while together with its associates’ shareholding in the
Company are greater than or equal to 10% of the votes available to be cast at General Meetings
of the Company. Morgan Seigler was appointed to the Board, as Nominee Director, at admission.
Morgan Seigler additionally has the ability to share confidential information with Bock in accordance
with the terms of the relationship agreement, subject to prior clearance from the rest of the Board.
Disclosures in the Strategic report
Regulations 2018, the Board has decided to include certain disclosures within the Strategic
Report, including:
Subject matter Page
Employee and stakeholder involvement Our engagement with stakeholders on page 28
and Sustainability on page 51
The employment of disabled people Sustainability on page 51
The future development, performance
and position of the Group
Strategic report on pages 01 to 76
Branches outside the UK Group information on page 154
Research and development activities Notes to the financial statements on page 140
Going Concern and Viability statement Viability Statement on page 47
Climate-related financial disclosures,
greenhouse gas consumption, energy
consumption and energy efficiency action
Sustainability on page 51
Additional disclosures
The following information can be found elsewhere in this document, as indicated in the table
below, and is incorporated into this report by reference.
Disclosure Page
Directors of the Company Board of Directors on page 80
Dividends Consolidated statement of changes In
shareholders’ equity on page 138
Financial instruments Notes to the financial statements on page 147
Important post balance sheet events since the
financial year end
Notes to the financial statements on page 193
Statement of Directors’ responsibilities Directors’ report on page 125
Information required to be included in the Annual Report and Accounts by LR 9.8.4 can be found
in this document as indicated in the table below:
Disclosure Page
Long-Term Incentive Plans Directors’ remuneration report on page 106
Confirmations regarding entering into a
relationship agreement with a controlling
shareholder and compliance with
independence provisions
Principal shareholder and relationship agreement
section on page 126
Agreements with a controlling shareholder Principal shareholder and relationship agreement
section on page 126
Statement of Directors’ responsibilities in respect of the
financial statements
The Directors are responsible for preparing the Annual Report and the financial statements in
accordance with applicable law and regulation.
Company law requires the Directors to prepare financial statements for each financial year.
Under that law the Directors have prepared the Group financial statements in accordance with
UK-adopted international accounting standards and the Company financial statements in
Accounting Standards, comprising FRS 101 ‘Reduced Disclosure Framework’, and applicable law).
Under company law, Directors must not approve the financial statements unless they are
satisfied that they give a true and fair view of the state of affairs of the Group and Company
and of the profit or loss of the Group for that period. In preparing the financial statements, the
Directors are required to:
Strategic Report Corporate Governance Financial Statements128
EUROWAG Annual Report and Accounts 2023
@
Select suitable accounting policies and then apply them consistently
@
State whether applicable UK-adopted international accounting standards have been followed
for the Group financial statements and United Kingdom Accounting Standards, comprising
FRS 101 have been followed for the Company financial statements, subject to any material
departures disclosed and explained in the financial statements
@
Make judgements and accounting estimates that are reasonable and prudent
@
Prepare the financial statements on the Going concern basis unless it is inappropriate to
presume that the Group and Company will continue in business
The Directors are responsible for safeguarding the assets of the Group and Company and hence
for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are also responsible for keeping adequate accounting records that are sufficient
to show and explain the Group’s and Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Group and Company and enable them to ensure
that the financial statements and the Directors’ Remuneration Report comply with the
Companies Act 2006.
The Directors are responsible for the maintenance and integrity of the Company’s website.
Legislation in the United Kingdom governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Directors’ confirmations
The Directors consider that the Annual Report and Accounts, taken as a whole, is fair, balanced
and understandable. They believe it furnishes shareholders with the information necessary
needed to evaluate the Company’s position, performance, business model and strategy. Each of
the Directors, whose names and roles are detailed in the Board of Directors section on page 80,
confirms that, to the best of their knowledge:
@
The consolidated financial statements, prepared in accordance with UK-adopted International
Accounting Standards, give a true and fair view the assets, liabilities, financial position and
profits or loss of the Group
@
The Company’s financial statements, prepared following United Kingdom Accounting
Standards, including FRS 101, give a true and fair view of the Company’s assets, liabilities
and financial position
@
The Strategic Report within this document includes a fair review of the development and
performance of the business and the position of the Company and the wider Group, together
with a description of the principal risks and uncertainties that it faces
In the case of each Director in office at the date the Directors’ Report is approved:
@
So far as the Director is aware, there is no relevant audit information of which the Group’s
and Company’s Auditors are unaware
@
They have taken all the steps that they ought to have taken as a Director in order to make
themselves aware of any relevant audit information and to establish that the Group’s and
Company’s Auditors are aware of that information
Going concern
In accordance with Provision 30 of the Code, the Directors consider it appropriate to continue
to adopt the Going concern basis of accounting in preparing the financial statements. The
Directors, having made appropriate enquiries, are satisfied that the Company and Group as a
whole has adequate resources to continue operations for a period of at least 12 months from
the date of this report. A comprehensive Going concern statement is presented on page 49.
Viability statement
In accordance with Provision 31 of the Code, the Directors are required to provide a Viability
statement that states whether the Company and Group will be able to continue in operation
and meet its liabilities, taking into account its current position and the principal risks it faces.
The Directors must also specify the period covered by, and the appropriateness of, this
statement. The Directors’ evaluation of the Company’s viability is detailed on page 47.
Fair, balanced and understandable
The Directors consider the Annual Report and Accounts, taken as a whole, is fair, balanced and
understandable, and gives shareholders the information needed to assess the Group’s position
and performance, business model and strategy.
This responsibility statement was approved by the Board of Directors and is signed by order of
the Board by:
For and on behalf of Computershare Company Secretarial Services Limited
Company Secretary
25 March 2024
Directors’ report continued
Independent auditors’ report
Consolidated financial statements
Notes to the consolidated financial statements
Company financial statements
Notes to the Company financial statements
Glossary
Company information
Financial
statements
EUROWAG Annual Report and Accounts 2023
129Strategic Report Corporate Governance Financial Statements
Strategic Report Corporate Governance Financial Statements130
EUROWAG Annual Report and Accounts 2023
Independent auditors’ report to the members of W.A.G Payment Solutions plc
Report on the audit of the financial statements
Opinion
In our opinion:
@
W.A.G Payment Solutions plc’s group financial statements and company financial statements
(the “financial statements”) give a true and fair view of the state of the group’s and of the
company’s affairs as at 31 December 2023 and of the group’s loss and the group’s cash flows
for the year then ended;
@
the group financial statements have been properly prepared in accordance with UK-adopted
international accounting standards as applied in accordance with the provisions of the
Companies Act 2006;
@
the company financial statements have been properly prepared in accordance with United
Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards,
including FRS 101 “Reduced Disclosure Framework”, and applicable law); and
@
the financial statements have been prepared in accordance with the requirements of the
Companies Act 2006.
We have audited the financial statements, included within the Annual Report and Accounts
(the “Annual Report”), which comprise: Consolidated and Company Statements of Financial
Position as at 31 December 2023; the Consolidated Statement of Comprehensive Income, the
Consolidated Statement of Cash Flows, the Consolidated and Company Statements of Changes
in Shareholders’ Equity for the year then ended; and the notes to the financial statements,
comprising material accounting policy information and other explanatory information.
Our opinion is consistent with our reporting to the Audit and Risk Committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs
(UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the
Auditors’ responsibilities for the audit of the financial statements section of our report. We
believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, which includes the FRC’s Ethical
Standard, as applicable to listed public interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements.
To the best of our knowledge and belief, we declare that non-audit services prohibited by the
FRC’s Ethical Standard were not provided.
Other than those disclosed in note 2 to the Consolidated Financial Statements, we have provided
no non-audit services to the company or its controlled undertakings in the period under audit.
Our audit approach
Overview
Audit scope
@
PwC component audit teams were engaged to perform two full scope audits in the Czech
Republic and one in Poland. The PwC Czech Republic component team were also requested
to perform specified procedures over certain balances and transactions. The Group audit team
carried out audit procedures over centralised balances, the consolidation and the company.
Key audit matters
@
Presentation of adjusting items to EBITDA (group)
@
Valuation of the acquired Inelo intangibles (group)
@
Impairment of goodwill within the Fleet Management Solutions CGU (group)
@
Carrying value of investment in subsidiaries (parent)
Materiality
@
Overall group materiality: EUR 7,695,000 (2022: EUR 5,725,000) based on 3% of net energy
and services sales.
@
Overall company materiality: EUR 2,739,000 (2022: EUR 2,778,000) based on 1% of
total assets.
@
Performance materiality: EUR 5,771,000 (2022: EUR 4,293,000) (group) and EUR 2,054,000
(2022: EUR 2,083,500) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most
significance in the audit of the financial statements of the current period and include the most
significant assessed risks of material misstatement (whether or not due to fraud) identified by
the auditors, including those which had the greatest effect on: the overall audit strategy; the
allocation of resources in the audit; and directing the efforts of the engagement team. These
matters, and any comments we make on the results of our procedures thereon, were addressed
in the context of our audit of the financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on these matters.
This is not a complete list of all risks identified by our audit.
Valuation of the acquired Inelo intangibles (group) and impairment of goodwill within the Fleet
Management Solutions CGU (group) are new key audit matters this year. Otherwise, the key
audit matters below are consistent with last year.
Strategic Report Corporate Governance Financial Statements 131
EUROWAG Annual Report and Accounts 2023
Key audit matter How our audit addressed the key audit matter
Presentation of adjusting items
to EBITDA (group)
As at 31 December 2023, certain costs have been
classified as adjusting items impacting adjusted
EBITDA and certain other costs have been classified
as adjusting items impacting adjusted earnings for
the year.
The adjusting items impacting adjusted EBITDA
relate to: M&A related expenses; strategic
transformation expenses; share based
compensation; impairment losses of non-financial
assets and restructuring costs.
The adjusting items impacting adjusted earnings
relate to amortisation of acquired intangibles, offset
by a tax effect of adjusting items.
We focused on this area as there is no definition of
an adjusting item within IFRS and so judgement is
required by the directors in determining whether
items classified as adjusting are consistent with the
group’s accounting policy.
We also focussed on this area given the potential
fraud risk attached to the presentation of these
items in meeting market consensus and profit based
personal incentive targets.
Refer to the Notes 6 and 11 to the financial
statements and the Key accounting issues,
significant judgements and significant estimates
section of the Audit and Risk Committee report.
We have considered the nature of the balances and
challenged the directors as to whether the items
disclosed as adjusting items are consistent with the
accounting policy, with the approach taken in previous
reporting periods and with the FRC’s guidance.
We evaluated and understood the rationale behind each
adjusting item and audited each category of adjusting
items to EBITDA to a specific materiality of EUR 1.0m.
This involved agreeing the sampled items to underlying
supporting documentation and assessing whether the
treatment of the item as adjusting was consistent with
the group’s accounting policy.
For amortisation of acquired intangibles we have target
tested these expenses and assessed whether the
treatment of each item as adjusting was consistent
with the group’s accounting policy.
We have also challenged the disclosures included in
the Notes to the financial statements to assess whether
they were clear and balanced.
Based on our procedures, the presentation and
disclosure of adjusting items is consistent with the
evidence obtained.
Valuation of the acquired Inelo
intangibles (group)
On 15 March 2023 the group acquired 100% of the
share capital of Grupa Inelo S.A (“Inelo”).
In accordance with IFRS 3, the directors are required
to perform an exercise to determine the fair values of
the identifiable assets acquired and liabilities
assumed at the date of acquisition, which has
resulted in the recognition of intangible assets and
associated goodwill alongside the net assets of
Inelo.
We focused on this area because the valuation of
intangible assets requires the directors to exercise
judgement in generating the fair value of these
assets, as it is derived from models which include
subjective assumptions and cash flow estimates.
Refer to the Notes 6 and 8 to the financial
statements and the Key accounting issues,
significant judgements and significant estimates
section of the Audit and Risk Committee report.
As part of our audit of the directors’ fair value exercise
and the associated intangible valuations models:
@
We validated that the methodology applied to value
each individual intangible asset was reasonable and
in line with market practice.
@
We tested the fair value ascribed to intangible assets
by understanding the assumptions adopted, which
primarily include the cash flow forecasts, customer
attrition and discount rates.
@
We obtained evidence to evaluate the key
assumptions underpinning the cash flow forecasts,
including considering the existence of contradictory
evidence.
@
We used our internal valuation experts to determine
that the assumptions on discount rate and attrition
rates were reasonable, through reference to suitable
third-party comparator information.
@
We audited the disclosures related to business
combinations to ensure these were consistent with
the requirements of IFRS 3.
Based on our procedures, the valuation of intangible
assets relating to the Inelo business and the disclosures
included in the financial statements are consistent with
the evidence obtained.
Key audit matter How our audit addressed the key audit matter
Impairment of goodwill within the Fleet
Management Solutions CGU (group)
In accordance with IAS 36 (Impairment of assets),
goodwill must be tested for impairment on at least an
annual basis. The determination of recoverable
amount, being the higher of value-in-use and fair
value less costs of disposal, requires estimation by
the directors to value the relevant CGU.
The directors have charged an impairment to
goodwill in the year to the Fleet Management
Solutions (“FMS”) CGU, due to a reduction in the
cash flows expected to be generated from the CGU.
The impairment charge has been reported as an
adjusting item to EBITDA.
We focused on the risk of impairment within the FMS
CGU as the impairment test involves several
subjective estimates by the directors. These
estimates include key assumptions in relation to the
future cash flows of the CGU, including considering
the impact of climate change, and the level of
synergies expected to be realised following the
acquisition of Inelo.
Refer to the Notes 6 and 19 to the financial
statements and the Key accounting issues,
significant judgements and significant estimates
section of the Audit and Risk Committee report.
As part of our audit of the directors’ impairment
assessment and underlying discounted cash flow
model:
@
We obtained and audited the impairment model
which calculates the value-in-use based on five year
forecast cash flows.
@
We identified the key assumptions within the cash
flow forecast for the next five years and focused our
work on these. We verified these cash flows to
underlying support, including Board approved
budgets and third-party market forecast data. We
challenged the basis of the forecasts to validate that
all key assumptions were supportable and that the
cash flows reflected the CGUs current strategic plan,
including the integration activities within the Inelo
business and the resultant realisation of synergy
benefits. We also challenged the potential impact of
climate change to the cash flow forecast, ensuring
this was consistent with the assessment performed
within the TCFD disclosures.
@
We used our internal valuation experts to determine
that the discount rate and growth rate were within an
acceptable range through reference to suitable
third-party comparator information.
@
We obtained the assessment of the fair value less
costs of disposal of the CGU and evaluated the
reasonableness of the assumptions applied,
specifically the estimated costs of disposal and
EBITDA multiple through the use of our internal
valuation experts.
@
We evaluated the disclosures included in the
financial statements, including the sensitivity
analysis, to validate that these were in compliance
with IAS 36.
Based on our procedures, the impairment charge
recognised and the disclosures included in the financial
statements are consistent with the evidence obtained.
Carrying value of investment in subsidiaries
(parent)
Investment in subsidiaries are accounted for in the
Company balance sheet at cost less provision for
impairment. Investments are tested for impairment if
impairment indicators exist. If such indicators exist,
the recoverable amounts of the investments in
subsidiaries are estimated in order to determine the
extent of the impairment loss, if any. Any such
impairment loss is recognised in the income
statement.
A review for indicators of impairment was performed
by the directors, including considering the latest
available forecasts and developments in the Group
during the year. The assessment identified no
impairment indicator in respect of the investments in
subsidiaries.
Refer to the Note 6 to the company financial
statements.
We evaluated the directors’ determination of whether
there were any other indicators of impairment. Our
procedures included:
@
comparing the carrying value of investment with the
market capitalisation of the Group at 31 December
2023; and
@
comparing the carrying value of investment with the
carrying amount of investees’ net assets.
Overall, we found the assessment of the carrying value
of investment in subsidiaries and associated
disclosures to be consistent with the evidence
obtained.
Strategic Report Corporate Governance Financial Statements132
EUROWAG Annual Report and Accounts 2023
Independent auditors’ report to the members of W.A.G Payment Solutions plc continued
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give
an opinion on the financial statements as a whole, taking into account the structure of the group
and the company, the accounting processes and controls, and the industry in which they
operate.
The group financial statements are a consolidation of multiple reporting units across Europe,
comprising the group’s operating businesses and centralised functions. These reporting units
maintain their own accounting records and controls and report to the head office finance team in
the Czech Republic for consolidation purposes. In establishing the overall approach to the Group
audit, we identified four reporting units which, in our view, required an audit of their complete
financial information both due to their size or risk characteristics: W.A.G Payment Solutions plc
(the Company); W.A.G Payment Solutions a.s; W.A.G Issuing Services a.s (both incorporated in
the Czech Republic); and Inelo Polska (incorporated in Poland). W.A.G Payment Solutions plc (the
company) was audited by the Group engagement team, W.A.G Payment Solutions a.s, and W.A.G
Issuing Services a.s were audited by PwC Czech Republic and Inelo Polska was audited by PwC
Poland. We also added three components to our scope to perform specified procedures to
ensure sufficient coverage of certain balances within the group consolidation, which were all
performed by PwC Czech Republic. Where work was performed by component auditors, we
determined the appropriate level of involvement we needed to have in that audit work to ensure
that we could conclude that sufficient appropriate audit evidence had been obtained for the
Group Financial Statements as a whole. In addition to instructing and reviewing the reporting
from our component audit teams, we conducted file reviews and participated in key meetings
with local management. Most of these meetings took place remotely but we visited the Czech
Republic twice in person to meet group and local management as well as the PwC Czech
Republic and PwC Poland component auditors. We also had regular dialogue with component
teams throughout the audit. The Group consolidation and financial statement disclosures
included in Group audit scope were audited by the Group audit team. Based on the detailed audit
work performed across the Group, we obtained coverage of 87% of net energy and services
sales.
The impact of climate risk on our audit
In planning our audit, we considered the potential impacts of climate change on the group’s
business and its financial statements. We made enquiries of the directors’ to understand the
process for assessing climate-related risks and opportunities, the extent of the potential impact
of climate change risk on the Group’s financial statements and the Group’s preparedness for this.
The Sustainability report describes and explains how climate change could have an impact on
the group’s business. Using our knowledge of the business we considered whether the risks
identified are materially complete and have been appropriately estimated and disclosed. We
have assessed how the group has considered the impact of climate change risk on the
impairment assessment over non-current assets (see Kay Audit Matter above) and ensured
consistency to the impact in the Group’s viability assessment and TCFD disclosures.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain
quantitative thresholds for materiality. These, together with qualitative considerations, helped us
to determine the scope of our audit and the nature, timing and extent of our audit procedures on
the individual financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a
whole as follows:
Financial statements - group Financial statements - company
Overall materiality EUR 7,695,000
(2022: EUR 5,725,000).
EUR 2,739,000
(2022: EUR 2,778,000).
How we determined it 3% of net energy and
services sales
1% of total assets
Rationale for
benchmark applied
Net energy and services sales is a
key metric used by the directors
and external stakeholders to
assess the performance of the
group and it removes any impact
of significant volatility in gross
revenue and cost of sales due to
oil price fluctuations.
Based on the nature of the Plc
company, trading is not the
entity’s main function. The Plc
company has transactions that
are there to support the group in
its trading and so total assets is
considered appropriate and is a
generally accepted auditing
benchmark.
For each component in the scope of our group audit, we allocated a materiality that is less than
our overall group materiality. The range of materiality allocated across components was between
EUR 2,739,000 to EUR 7,125,100. Certain components were audited to a local statutory audit
materiality that was also less than our overall group materiality.
We use performance materiality to reduce to an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements exceeds overall materiality.
Specifically, we use performance materiality in determining the scope of our audit and the nature
and extent of our testing of account balances, classes of transactions and disclosures, for
example in determining sample sizes. Our performance materiality was 75% (2022: 75%) of
overall materiality, amounting to EUR 5,771,000 (2022: EUR 4,293,000) for the group financial
statements and EUR 2,054,000 (2022: EUR 2,083,500) for the company financial statements.
In determining the performance materiality, we considered a number of factors - the history of
misstatements, risk assessment and aggregation risk and the effectiveness of controls - and
concluded that an amount at the upper end of our normal range was appropriate.
We agreed with the Audit and Risk Committee that we would report to them misstatements
identified during our audit above EUR 384,750 (group audit) (2022: EUR 286,000) and EUR
136,950 (company audit) (2022: EUR 138,900) as well as misstatements below those amounts
that, in our view, warranted reporting for qualitative reasons.
Strategic Report Corporate Governance Financial Statements 133
EUROWAG Annual Report and Accounts 2023
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group’s and the company’s ability to continue
to adopt the going concern basis of accounting included:
@
Obtaining and agreeing the directors’ going concern assessment to the Group’s Board
approved plan and ensuring that the base case scenario, representing the trading
performance to September 2025, indicates that the Group generates sufficient cash flows to
meets its obligations while complying with covenant arrangements;
@
Engaging our specialists to perform a number of the procedures listed below;
@
Corroborating growth forecasts to third-party market data and revenue and cost synergies to
internally approved plans and third-party consultant assessments;
@
Obtaining and reviewing the updated amendment letter to the Group’s Club Finance
agreement to conclude no interest cover covenant test at 30 June 2024;
@
Assessing the historical accuracy and reasonableness of the directors’ forecasting;
@
Analysing the cash flows in the forecast models to identify unexpected trends and
relationships and ensuring the mathematical accuracy of management’s models;
@
Evaluating management’s severe but plausible downside scenario to ensure that it reflected
historically experienced levels of disruptions, ensuring this is appropriately modelled through
the cash flows and that the mitigating actions proposed by the directors’ are achievable;
@
Assessing whether climate change is expected to have a significant impact during the period
of the going concern assessment; and
@
Reviewing the related disclosures in the Annual Report and Accounts.
Based on the work we have performed, we have not identified any material uncertainties relating
to events or conditions that, individually or collectively, may cast significant doubt on the group’s
and the company’s ability to continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going
concern basis of accounting in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a
guarantee as to the group’s and the company’s ability to continue as a going concern.
In relation to the directors’ reporting on how they have applied the UK Corporate Governance
Code, we have nothing material to add or draw attention to in relation to the directors’ statement
in the financial statements about whether the directors considered it appropriate to adopt the
going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with respect to going concern are
described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the
financial statements and our auditors’ report thereon. The directors are responsible for the other
information. Our opinion on the financial statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly
stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the audit, or otherwise appears to be
materially misstated. If we identify an apparent material inconsistency or material misstatement,
we are required to perform procedures to conclude whether there is a material misstatement of
the financial statements or a material misstatement of the other information. If, based on the
work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report based on these
responsibilities.
With respect to the Strategic report and Directors’ report, we also considered whether the
disclosures required by the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us
also to report certain opinions and matters as described below.
Strategic report and Directors’ report
In our opinion, based on the work undertaken in the course of the audit, the information given in
the Strategic report and Directors’ report for the year ended 31 December 2023 is consistent
with the financial statements and has been prepared in accordance with applicable legal
requirements.
In light of the knowledge and understanding of the group and company and their environment
obtained in the course of the audit, we did not identify any material misstatements in the
Strategic report and Directors’ report.
Directors’ Remuneration
In our opinion, the part of the Remuneration Report to be audited has been properly prepared in
accordance with the Companies Act 2006.
Corporate governance statement
The Listing Rules require us to review the directors’ statements in relation to going concern,
longer-term viability and that part of the corporate governance statement relating to the
company’s compliance with the provisions of the UK Corporate Governance Code specified for
our review. Our additional responsibilities with respect to the corporate governance statement as
other information are described in the Reporting on other information section of this report.
Strategic Report Corporate Governance Financial Statements13 4
EUROWAG Annual Report and Accounts 2023
Independent auditors’ report to the members of W.A.G Payment Solutions plc continued
Based on the work undertaken as part of our audit, we have concluded that each of the following
elements of the corporate governance statement, included within the Strategic Report and
Governance sections is materially consistent with the financial statements and our knowledge
obtained during the audit, and we have nothing material to add or draw attention to in relation to:
@
The directors’ confirmation that they have carried out a robust assessment of the emerging
and principal risks;
@
The disclosures in the Annual Report that describe those principal risks, what procedures are
in place to identify emerging risks and an explanation of how these are being managed or
mitigated;
@
The directors’ statement in the financial statements about whether they considered it
appropriate to adopt the going concern basis of accounting in preparing them, and their
identification of any material uncertainties to the group’s and company’s ability to continue to
do so over a period of at least twelve months from the date of approval of the financial
statements;
@
The directors’ explanation as to their assessment of the group’s and company’s prospects, the
period this assessment covers and why the period is appropriate; and
@
The directors’ statement as to whether they have a reasonable expectation that the company
will be able to continue in operation and meet its liabilities as they fall due over the period of
its assessment, including any related disclosures drawing attention to any necessary
qualifications or assumptions.
Our review of the directors’ statement regarding the longer-term viability of the group and
company was substantially less in scope than an audit and only consisted of making inquiries
and considering the directors’ process supporting their statement; checking that the statement
is in alignment with the relevant provisions of the UK Corporate Governance Code; and
considering whether the statement is consistent with the financial statements and our
knowledge and understanding of the group and company and their environment obtained in the
course of the audit.
In addition, based on the work undertaken as part of our audit, we have concluded that each of
the following elements of the corporate governance statement is materially consistent with the
financial statements and our knowledge obtained during the audit:
@
The directors’ statement that they consider the Annual Report, taken as a whole, is fair,
balanced and understandable, and provides the information necessary for the members to
assess the group’s and company’s position, performance, business model and strategy;
@
The section of the Annual Report that describes the review of effectiveness of risk
management and internal control systems; and
@
The section of the Annual Report describing the work of the Audit and Risk Committee.
We have nothing to report in respect of our responsibility to report when the directors’ statement
relating to the company’s compliance with the Code does not properly disclose a departure from
a relevant provision of the Code specified under the Listing Rules for review by the auditors.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of directors’ responsibilities in respect of the financial
statements, the directors are responsible for the preparation of the financial statements in
accordance with the applicable framework and for being satisfied that they give a true and fair
view. The directors are also responsible for such internal control as they determine is necessary
to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and
the company’s ability to continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting unless the directors either
intend to liquidate the group or the company or to cease operations, or have no realistic
alternative but to do so.
Auditors’ responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a
whole are free from material misstatement, whether due to fraud or error, and to issue an
auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We
design procedures in line with our responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The extent to which our procedures
are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the group and industry, we identified that the principal risks of
non-compliance with laws and regulations related to the FCA Listing Rules and health and safety,
and we considered the extent to which non-compliance might have a material effect on the
financial statements. We also considered those laws and regulations that have a direct impact on
the financial statements such as taxation and the Companies Act 2006. We evaluated
management’s incentives and opportunities for fraudulent manipulation of the financial
statements (including the risk of override of controls), and determined that the principal risks
were related to posting inappropriate journal entries that credit revenue or EBITDA. The group
engagement team shared this risk assessment with the component auditors so that they could
Strategic Report Corporate Governance Financial Statements 135
EUROWAG Annual Report and Accounts 2023
include appropriate audit procedures in response to such risks in their work. Audit procedures
performed by the group engagement team and/or component auditors included:
@
Discussions among the engagement personnel covering the potential for material
misstatements due to error or fraud, the risks associated with related parties and emphasis on
the need to maintain professional scepticism throughout the engagement;
@
Inquiries of the directors, management and others within the entity, including those outside of
finance, as to their knowledge, awareness and concerns regarding fraud, or breaches in laws
and regulations;
@
Identification and testing of journal entries that hit our risk criteria, in particular any journal
entries posted with unusual account combinations which resulted in a credit to revenue/
EBITDA and incorporating an element of unpredictability in the nature, timing and extent of
audit procedures performed;
@
Assessment of matters reported on the Group’s whistleblowing helpline and the results of
investigation of such matters;
@
Testing accounting estimates made by the directors;
@
Reading the minutes of the Board meetings to identify any inconsistencies with other
information provided by management;
@
Reviewing component teams’ key working papers for all in-scope components, with a
particular focus on the areas involving judgement and estimates;
@
Reviewing internal audit reports in so far as they related to the financial statements; and
@
Reviewing legal expense accounts to identify items which may indicate the existence of
material legal claims.
There are inherent limitations in the audit procedures described above. We are less likely to
become aware of instances of non-compliance with laws and regulations that are not closely
related to events and transactions reflected in the financial statements. Also, the risk of not
detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or
intentional misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and
balances, possibly using data auditing techniques. However, it typically involves selecting a
limited number of items for testing, rather than testing complete populations. We will often seek
to target particular items for testing based on their size or risk characteristics. In other cases, we
will use audit sampling to enable us to draw a conclusion about the population from which the
sample is selected.
A further description of our responsibilities for the audit of the financial statements is located on
the FRC’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members
as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other
purpose. We do not, in giving these opinions, accept or assume responsibility for any other
purpose or to any other person to whom this report is shown or into whose hands it may come
save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
@
we have not obtained all the information and explanations we require for our audit; or
@
adequate accounting records have not been kept by the company, or returns adequate for our
audit have not been received from branches not visited by us; or
@
certain disclosures of directors’ remuneration specified by law are not made; or
@
the company financial statements and the part of the Remuneration Report to be audited are
not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Appointment
Following the recommendation of the Audit and Risk Committee, we were appointed by the
directors on 2 December 2021 to audit the financial statements for the year ended 31 December
2021 and subsequent financial periods. The period of total uninterrupted engagement is three
years, covering the years ended 31 December 2021 to 31 December 2023.
Other matter
As required by the Financial Conduct Authority Disclosure Guidance and Transparency Rule
4.1.14R, these financial statements form part of the ESEF-prepared annual financial report filed
on the National Storage Mechanism of the Financial Conduct Authority in accordance with the
ESEF Regulatory Technical Standard (‘ESEF RTS’). This auditors’ report provides no assurance
over whether the annual financial report has been prepared using the single electronic format
specified in the ESEF RTS.
26 March 2024
Strategic Report Corporate Governance Financial Statements136
EUROWAG Annual Report and Accounts 2023
Consolidated statement of comprehensive income (EUR ’000)
For the year ended 31 December
Notes 2023 2022
Revenue from contracts with customers 10 2,088,107 2,368,252
Costs of energy sold
(1,831,577 ) (2,177,395 )
Net energy and services sales 10 256,530 190,857
Other operating income 15 10,089 449
Employee expenses 12 (96,793 ) (67,212 )
Impairment losses of financial assets 25 (8,884 ) (3,912 )
Impairment losses of non-financial assets 19 (56,663 ) —
Technology expenses
(18,931 ) (9,823 )
Other operating expenses 14 (55,510 ) (47,227 )
Operating profit before depreciation and amortisation
(EBITDA) 29,838 63,132
Analysed as:
Adjusting items 11 78,862 18,461
Adjusted EBITDA 11 108,700 81,593
Depreciation and amortisation 11 (57,529 ) (30,393 )
Operating (loss)/profit
(27,691 ) 32,739
Finance income 16 14,682 4,750
Finance costs 17 (25,794 ) (8,802 )
Share of net loss of associates accounted for using the
equity method (504 ) (711 )
(Loss)/profit before income tax
(39,307 ) 27,976
Income tax expense 18 (4,241 ) (10,280 )
(Loss)/profit from continuing operations (43,548 ) 17,696
Loss after tax for the year from discontinued operations (489 ) —
(LOSS)/PROFIT FOR THE YEAR
(44,037 ) 17,696
For the year ended 31 December
Notes 2023 2022
OTHER COMPREHENSIVE (EXPENSE)/INCOME
Change in fair value of cash flow hedge recognised in equity 26 (7,139 ) 7,602
Exchange differences on translation of foreign operations
Deferred tax related to other comprehensive income
Changes in fair value of equity investments at fair value
through other comprehensive income 23 (15,475 ) —
TOTAL OTHER COMPREHENSIVE (EXPENSE)/INCOME (5,921 ) 8,905
TOTAL COMPREHENSIVE (EXPENSE)/INCOME FOR THE
YEAR
(49,958 ) 26,601
Total (loss)/profit for the financial year attributable to equity
holders of the Company
(45,637 ) 16,630
Total profit for the financial year attributable to non-
controlling interests
Total comprehensive (expense)/income for the financial year
attributable to equity holders of the Company
(51,552 ) 25,507
Total comprehensive income for the financial year
attributable to non-controlling interests
Earnings per share (in cents per share): 29
Basic earnings per share (6.62 ) 2.41
Diluted earnings per share (6.62 ) 2.41
Strategic Report Corporate Governance Financial Statements 137
EUROWAG Annual Report and Accounts 2023
Consolidated statement of financial position (EUR ’000)
As at 31 December
Notes 2023 2022
ASSETS
Non-current assets
Intangible assets 19 532,404 268,171
Property, plant and equipment 20 55,760 39,826
Right-of-use assets 21 22,226 13,340
Investments in associates 22 11,719 12,223
Financial assets at fair value through other
comprehensive income 23 — 14,364
Deferred tax assets 18 9,564 10,505
Derivative assets 9, 26 — 3,093
Other non-current assets 4,845 3,791
Total non-current assets 636,518 365,313
Current assets
Inventories 24 14,903 20,291
Trade and other receivables 25 396,943 378,152
Income tax receivables 2,205 1,800
Derivative assets 9, 26 3,425 3,851
Cash and cash equivalents 27 90,343 146,003
Total current assets 507,819 550,097
TOTAL ASSETS 1,144,337 915,410
Shareholders’ equity and liabilities
Share capital 28 8,113 8,107
Share premium 28 2,958 2,958
Merger reserve 28 (25,963 ) (25,963 )
Other reserves 28 4,427 10,342
Business combinations equity adjustment (22,460 ) (12,526 )
Retained earnings 289,380 329,362
Equity attributable to equity holders of the Company 256,455 312,280
Non-controlling interests 28 6,381 4,283
Total equity 262,836 316,563
As at 31 December
Notes 2023 2022
Non-current liabilities
Interest-bearing loans and borrowings 30 293,822 121,272
Lease liabilities 21 17,417 9,510
Provisions 33 1,324 —
Deferred tax liabilities 18 28,878 8,677
Derivative liabilities 9, 26 3,140 186
Other non-current liabilities 32 9,236 27,376
Total non-current liabilities 353,817 167,021
Current liabilities
Trade and other payables 32 402,834 398,235
Interest-bearing loans and borrowings 30 113,297 21,884
Lease liabilities 21 4,909 3,917
Provisions 33 2,529 2,124
Income tax liabilities 3,927 5,649
Derivative liabilities 9, 26 188 17
Total current liabilities 527,684 431,826
TOTAL EQUITY AND LIABILITIES 1,144,337 915,410
The accompanying notes form an integral part of these financial statements.
The consolidated financial statements were approved by the Board of Directors and authorised
Company No. 13544823
Strategic Report Corporate Governance Financial Statements13 8
EUROWAG Annual Report and Accounts 2023
Consolidated statement of changes in shareholders’ equity (EUR ’000)
Notes
Share
capital
Share
premium
Merger
reserve
Other
reserves
Business
combinations
equity adjustment
Retained
earnings
Total equity
attributable to
equity holders of
the parent
Non-controlling
interests
Total
equity
At 1 January 2022 38,113 194,763 (25,963 ) 1,465 (17,046 ) 84,526 275,858 8,889 284,747
Profit for the year — — — — — 16,630 16,630 1,066 17,696
Other comprehensive income — — — 8,877 — — 8,877 28 8,905
Total comprehensive income — — — 8,877 — 16,630 25,507 1,094 26,601
Capital reduction 28 (30,006 ) (191,805 ) — — — 221,811 — — —
Dividends paid — — — — — — — (56 ) (56 )
Share-based payments 13 — — — — — 6,395 6,395 — 6,395
Acquisition of non-controlling interests 28 — — — — 5,644 — 5,644 (5,644 ) —
Put options held by non-controlling interests 32 — — — — (1,124 ) — (1,124 ) — (1,124 )
Total transactions with owners recognised
directly in equity (30,006 ) (191,805 ) — — 4,520 228,206 10,915 (5,700 ) 5,215
At 31 December 2022 8,107 2,958 (25,963 ) 10,342 (12,526 ) 329,362 312,280 4,283 316,563
(Loss)/profit for the year — — — — — (45,637 ) (45,637 ) 1,600 (44,037 )
Other comprehensive (expense)/income — — — (5,915 ) — — (5,915 ) (6 ) (5,921 )
Total comprehensive (expense)/income — — — (5,915 ) — (45,637 ) (51,552 ) 1,594 (49,958 )
Share options exercised 28 6 — — — — — 6 — 6
Dividends paid — — — — — — — (142 ) (142 )
Share-based payments 13 — — — — — 7,604 7,604 — 7,604
Acquisition of subsidiaries 8 — — — — (10,401 ) — (10,401 ) 3,683 (6,718 )
Sale of subsidiaries 28 — — — — — — — (525 ) (525 )
Acquisition of non-controlling interests 28 — — — — 4,461 (1,949 ) 2,512 (2,512 ) —
Put options held by non-controlling interests 8, 32 — — — — (3,994 ) — (3,994 ) — (3,994 )
Total transactions with owners recognised
directly in equity 6 — — — (9,934 ) 5,655 (4,273 ) 504 (3,769 )
At 31 December 2023 8,113 2,958 (25,963 ) 4,427 (22,460 ) 289,380 256,455 6,381 262,836
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Consolidated statement of cash flows (EUR ’000)
For the year ended 31 December
Notes 2023 2022
Cash flows from operating activities
(Loss)/profit before tax for the year (39,796 ) 27,976
Non-cash adjustments:
Depreciation and amortisation 11 57,529 30,393
Gain on disposal of non-current assets (209 ) (114 )
Interest income (219 ) (234 )
Interest expense 17 19,787 5,815
Movements in provisions 405 541
Impairment losses of financial assets 23 8,884 3,912
Movements in allowances for inventories 3 183
Impairment of goodwill 19 56,663 —
Foreign currency exchange rate differences (7,264 ) (1,838 )
Fair value revaluation of derivatives and securities (2,114 ) 2,769
Share-based payments 13 7,604 6,395
Other non-cash items 477 709
Working capital adjustments:
(Increase) in trade and other receivables and prepayments (19,401 ) (79,507 )
Decrease/(increase) in inventories 7,058 (10,156 )
(Decrease)/increase in trade and other payables (32,027 ) 75,087
Interest received 219 234
Interest paid (17,417 ) (10,123 )
Income tax paid (9,266 ) (7,799 )
Net cash inflow from operating activities 30,916 44,243
For the year ended 31 December
Notes 2023 2022
Cash flows from investing activities
Proceeds from sale of property, plant and equipment 1,534 289
Proceeds from sale of financial instruments — 56
Proceeds from sale of subsidiaries 8 150 —
Purchase of property, plant and equipment (12,582 ) (7,271 )
Purchase of intangible assets (37,437 ) (37,290 )
Purchase of financial instruments 23 (1,112 ) (14,364 )
Payments for acquisition of subsidiaries, net of cash acquired 8 (284,277 ) (42,712 )
Investment in associates — (3,000 )
Net cash (outflow) from investing activities (333,724 ) (104,292 )
Cash flows from financing activities
Payment of principal elements of lease liabilities (5,352 ) (3,112 )
Proceeds from borrowings 30 356,886 —
Repayment of borrowings (97,283 ) (15,014 )
Acquisition of non-controlling interests 28 (6,976 ) —
Dividend payments (142 ) (56 )
Proceeds from issued share capital 6 —
Net cash inflow/(outflow) from financing activities 247,139 (18,182 )
Net decrease in cash and cash equivalents (55,669 ) (78,231 )
Cash and cash equivalents at beginning of the financial year 146,001 224,154
Effect of exchange rate changes on cash and cash equivalents 10 78
Cash and cash equivalents at the end of year (net of bank
overdrafts) 27 90,342 146,001
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Providing payment solutions for fleets of professional transport and forwarding companies, as
Providing a unified way of electronic toll payments on a number of European road networks for
Recovery of VAT refunds and excise duty from European countries
Creating an automated journey book and optimising traffic with the use of integrated digital
Combining advanced solutions in the field of electronics, software engineering and
The sale of navigation licences
Other services
Facility A: EUR 150 million amortising facility with quarterly repayments plus a
Facility B: EUR 180 million committed facility with quarterly repayments plus a
Revolving Credit Facility (“RCF”) of EUR 235 million for revolving loans (up to EUR 85 million)
EUR 150 million uncommitted Incremental Facility for acquisitions, capital expenditure and
Net leverage: total net debt of no more than 3.75 times Adjusted EBITDA in 2024 and 3.5 times
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Power over the investee (i.e. existing rights that give it the current ability to direct the relevant
Exposure, or rights, to variable returns from its involvement with the investee
The ability to use its power over the investee to affect its returns
The contractual arrangement with the other vote holders of the investee
Rights arising from other contractual arrangements
The Group’s voting rights and potential voting rights
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Notes to the financial statements for the year ended 31 December 2023 continued
Disclosures of valuation methods, significant estimates and assumptions (Note 9)
Quantitative disclosures of fair value measurement hierarchy (Note 9)
Financial instruments carried at fair value (Note 26)
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Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair
The acceptance business model – sale through acceptance partner locations (petrol stations);
The bunkering business model – owned/rented truck parks and supply partnership sites
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Notes to the financial statements for the year ended 31 December 2023 continued
24hr assistance services – revenue recognised over the period for which the service is
Legal services – revenue recognised at the moment the service is rendered
When the deferred tax liability arises from the initial recognition of goodwill or of an asset or
When the deferred tax asset relating to the deductible temporary difference arises from the
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The technical feasibility of completing the intangible asset so that the asset will be available
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Notes to the financial statements for the year ended 31 December 2023 continued
How the asset will generate future economic benefits
The availability of resources to complete the asset
The ability to measure reliably the expenditure during development
The Group has the right to obtain a substantial economic benefit from the asset for the period
The lease is agreed for the lease of a specific asset, and the lessor does not have the right to
The Group has the right to control the use of an identifiable asset
The lease is longer than 12 months (short-term lease exemption allowed under IFRS 16)
The value of the new asset exceeds EUR 4,500 (low value exemption allowed under IFRS 16)
Fixed payments (lowered by any lease incentives)
Variable lease payments that are indexed or fixed to a rate
Call option to purchase where there is sufficient certainty that the lessee will make use of
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Payment of penalties for termination of the lease where the lease period corresponds to the
The value of the lease liability increased by the lease payment that the Group has paid before
The initial direct costs of the lease paid by the Group
The estimated value of the costs for dismantling and removing an identified asset or the
An increase by the asset’s modification and renovation costs required in the lease agreement,
The financial asset is held within a business model whose objective is to hold financial assets
The contractual terms of the financial asset give rise on specified dates to cash flows that are
Assets that are held for collection of contractual cash flows and for selling the financial assets,
Equity securities which are not held for trading and which the Group has irrevocably elected at
14 8 Strategic Report Corporate Governance Financial Statements
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Notes to the financial statements for the year ended 31 December 2023 continued
This category includes the financial assets held with strategy of active trading with financial
Expected credit losses are not calculated and recognised. Changes in the fair value and
PD is an estimate of the likelihood of default to occur over a given time period. It is calculated
EAD is an estimate of exposure at a future default date, taking into account expected changes
LGD is an estimate of the loss arising on default. It is based on the difference between the
The rights to receive cash flows from the asset have expired
The Group has transferred its rights to receive cash flows from the asset or has assumed an
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Cash flow hedges when hedging the exposure to variability in cash flows that is either
Hedges of a net investment in a foreign operation
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– Definition of accounting estimates
– Deferred tax related to assets and liabilities arising from a
– Disclosure of accounting policies
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Notes to the financial statements for the year ended 31 December 2023 continued
Payment solutions represent the Group’s revenues, which are based on recurring and frequent transactional payments. The segment includes Energy and Toll payments, which are the typical first
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,
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Notes to the financial statements for the year ended 31 December 2023 continued
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W.A.G. payment solutions – Branch Bulgaria
W.A.G. payment solutions, a.s. Spółka Akcyjna Oddział w Polsce
W.A.G. payment solutions a.s Merkezi Çek Cumhuriyeti İstanbul Merkez Şubesi
W.A.G. payment solutions, a.s. organizacná zložka
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Notes to the financial statements for the year ended 31 December 2023 continued
For interest rate swaps – the present value of the estimated future cash flows based on
For foreign currency forwards – the present value of future cash flows based on the forward
For put options – option pricing models (Monte Carlo)
FVOCI – income approach in 2023, discounted cash flow analysis in 2022
For other financial instruments – discounted cash flow analysis
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Notes to the financial statements for the year ended 31 December 2023 continued
Discount rate
Net energy and services sales for Energy CGU; revenues for Navigation and Fleet
Long-term revenue growth rate
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Notes to the financial statements for the year ended 31 December 2023 continued
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Notes to the financial statements for the year ended 31 December 2023 continued
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EUR 150 million committed facility A for the refinancing of all existing term loan indebtedness
EUR 180 million committed facility B for permitted acquisitions and capital expenditure
EUR 235 million committed auxiliary credit facility, of which EUR 85 million may be utilised by
EUR 150 million uncommitted incremental facility for permitted acquisitions, capital
Pledge of shares (mainly W.A.G payment solution, a.s.)
Pledge of receivables (Note 25)
Pledge of bank accounts (Note 27)
Pledge of trademarks
Adjusted EBITDA represents full year Adjusted EBITDA of companies acquired during the
Net debt includes lease liabilities and derivative liabilities
Adjusted net debt includes face amount of guarantees, bonds, standby or documentary letters
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Notes to the financial statements for the year ended 31 December 2023 continued
The sensitivity of the relevant statement of profit or loss item is the effect of the assumed
Strategic Report Corporate Governance Financial Statements 191
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Notes to the financial statements for the year ended 31 December 2023 continued
Maintaining a robust balance sheet and financial strength to provide strategic flexibility
Prioritising growth over dividends with no intention to declare dividends in the near term
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Notes
As at
31 December
2023
As at
31 December
2022
ASSETS
Non-current assets
Property, plant and equipment 380 359
Right-of-use assets 556 741
Investments in subsidiaries 6 191,270 126,306
Financial assets at amortised costs 7 79,814 —
Deferred tax assets — 236
Other non-current assets 512 511
Total non-current assets 272,532 128,153
Current assets
Trade and other receivables 9 968 147,999
Cash and cash equivalents 10 476 1,744
Total current assets 1,444 149,743
TOTAL ASSETS 273,976 277,896
SHAREHOLDERS’ EQUITY AND LIABILITIES
Share capital 11 8,113 8,107
Share premium 11 2,958 2,958
Merger reserve 11 42,035 42,035
Retained earnings 218,160 217,856
Total equity 271,266 270,956
Non-current liabilities
Lease liabilities 385 613
Total non-current liabilities 385 613
Current liabilities
Trade and other payables 12 2,171 6,124
Lease liabilities 154 203
Total current liabilities 2,325 6,327
TOTAL EQUITY AND LIABILITIES 273,976 277,896
The notes on pages 196 to 200 are an integral part of these financial statements.
The financial statements on pages 194 to 195 were approved by the Board of Directors and
authorised for issue on 26 March 2024. They were signed on its behalf by:
Company No. 13544823
Company statement of financial position (EUR ’000)
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Company statement of changes in shareholders’ equity (EUR ’000)
Notes
Share
capital
Share
premium
Merger
reserves
(Accumulated
losses)/Retained
earnings
Total
equity
At 1 January 2022 11 38,113 194,763 42,035 (1,398) 273,513
Loss for the period — — — (3,506) (3,506)
Total comprehensive income — — — (3,506) (3,506)
Transactions with owners in their capacity as owners:
Capital reduction 11 (30,006) (191,805) — 221,811 —
Share-based payments 11 — — — 949 949
At 31 December 2022 8,107 2,958 42,035 217,856 270,956
Loss for the period — — — (2,029) (2,029)
Total comprehensive income — — — (2,029) (2,029)
Transactions with owners in their capacity as owners:
Issue of share capital 11 6 — — — 6
Share-based payments 2,333 2,333
At 31 December 2023 8,113 2,958 42,035 218,160 271,266
196
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Strategic Report Corporate Governance Financial Statements196
Notes to the company financial statements continued
1. Corporate information
W.A.G payment solutions plc (the ”Company”) 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 trade on
the London Stock Exchange plc’s main market for listed securities on 13 October 2021.
The Company was incorporated on 3 August 2021.
2. Basis of preparation
The financial statements of the Company have been prepared in accordance with Financial
Reporting Standard 101, ‘Reduced Disclosure Framework’ (FRS 101). The financial statements
have been prepared under the historical cost convention and in accordance with the Companies
Act 2006. The financial statements are presented in EUR and all values are rounded to the
nearest thousand (EUR ’000), except where otherwise indicated.
The Company’s fiscal year begins on 1 January and ends on 31 December.
The preparation of financial statements in conformity with FRS 101 requires the use of certain
critical accounting estimates. It also requires management to exercise its judgement in the
process of applying the Company’s accounting policies. The areas involving a higher degree
of judgement or complexity, or areas where assumptions and estimates are significant to the
financial statements, are disclosed in Note 5.
The following exemptions from the requirements of IFRS have been applied in the preparation
of these financial statements, in accordance with FRS 101:
@
Paragraphs 45(b) and 46 to 52 of IFRS 2, ‘Share-based payment’ (details of the number and
weighted average exercise prices of share options, and how the fair value of goods or services
received was determined)
@
IFRS 7, ‘Financial instruments: Disclosures’
@
Paragraphs 91 to 99 of IFRS 13, ‘Fair value measurement’ (disclosure of valuation techniques
and inputs used for fair value measurement of assets and liabilities)
@
The following paragraphs of IAS 1, ‘Presentation of financial statements’:
@
10(d) (statement of cash flows)
@
16 (statement of compliance with all IFRS)
@
38A (requirement for minimum of two primary statements, including cash flow statements)
@
38B-D (additional comparative information)
@
111 (statement of cash flows information)
@
134-136 (capital management disclosures)
@
IAS 7, ‘Statement of cash flows’
@
Paragraphs 30 and 31 of IAS 8, ‘Accounting policies, changes in accounting estimates and
errors’ (requirement for the disclosure of information when an entity has not applied a new
IFRS that has been issued but is not yet effective)
@
Paragraph 17 of IAS 24, ‘Related party disclosures’ (key management compensation)
@
The requirements in IAS 24, ‘Related party disclosures’, to disclose related party transactions
entered into between two or more members of a group
Going concern
The financial statements have been prepared on a going concern basis. Having considered the
ability of the Company and the Group to operate within its existing facilities and meet its debt
covenants, the Directors have a reasonable expectation that the Company and the Group have
adequate resources to continue in operational existence for the foreseeable future. The adoption
of the going concern basis is based on an expectation that the Group will have adequate
resources to continue in operational existence for at least twelve months from the signing of the
consolidated full year financial statements.
The Directors considered the Group’s business activities, together with the principal risks and
uncertainties, likely to affect its future performance and position.
For the purpose of this going concern assessment, the Directors have considered the Group’s FY
2024 budget together with extended forecasts for the period to September 2025. The review
also included the financial position of the Group, its cash flows and adherence to its banking
covenants.
The Group has access to a Club Finance facility which matures in September 2027 comprising of
the following:
@
Facility A: EUR 150 million amortising facility with quarterly repayments plus a
EUR 45 million balloon
@
Facility B: EUR 180 million committed facility with quarterly repayments plus a
EUR 45 million balloon
@
Revolving Credit Facility (“RCF”) of EUR 235 million for revolving loans (up to EUR 85 million)
and ancillary facilities (up to EUR 150 million)
@
EUR 150 million uncommitted Incremental Facility for acquisitions, capital expenditure and
revolving credit facilities up to EUR 50 million of which not more than EUR 25 million for
revolving loans
Strategic Report Corporate Governance Financial Statements 197
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Notes to the company financial statements continued
The Group’s Club Finance facility requires the Group to comply with the following three financial
covenants which are tested semi-annually:
@
Net leverage: total net debt of no more than 3.75 times Adjusted EBITDA in 2024 and 3.5 times
in 2025 and onwards
@
Interest cover: Adjusted EBITDA is not less than 4.0 times finance charges
@
Adjusted net leverage: Adjusted net debt (including guarantees) of no more than 6.5 times
Adjusted EBITDA
Noting that on 14 March 2024, the Group signed an amendment to its Club Finance facility
removing the requirement to calculate the interest cover covenant at 30 June 2024. Furthermore,
the Group also increased the amount that can be used for revolving loans from EUR 25 million to
EUR 40 million under the uncommitted Incremental Facility. The total amount of the uncommitted
Incremental Facility remains unchanged at EUR 150 million (with EUR 83.5 million committed as
at the year-end). See Note 30 for the covenant assessment as at 31 December 2023.
Throughout the period to September 2025, the Group has available liquidity and on the basis of
current forecasts is expected to remain in compliance with all banking covenants.
In arriving at the conclusion on going concern, the Directors have given due consideration to
whether the funding and liquidity resources above are sufficient to accommodate the principal
risks and uncertainties faced by the Group. The Directors have reviewed the financial forecasts
across a range of scenarios and prepared both a base case and severe but plausible downside
case. The severe downside case assumes a deterioration in trading performance relating to a
decline in product demand, as well as supply chain risks. These downsides would be partly
offset by the application of mitigating actions to the extent they are under management’s
control, including deferrals of capital and other discretionary expenditure. The most extreme
downside scenario incorporating an aggregation of all risks considered, showed a year-on-year
decline in net revenue by 4% and an EBITDA margin of 41.5% in comparison to the base case of
net revenue growth of 15% and a EBITDA margin of 42.4%. These adjusted projections do not
show a breach of covenants in respect of available funding facilities or any liquidity shortfall.
In all scenarios, the Group has sufficient liquidity and adequate headroom in the club finance
facilities to meet its liabilities as they fall due and the Group complies with the financial
covenants at 30 June and 31 December throughout the forecast period. The Group has also
carried out reverse stress tests against the downside case to determine the performance levels
that would result in a breach of covenants and the Directors do not consider such a scenario to
be plausible. The Directors have also considered the impact of climate-related matters on the
Group’s going concern assessment, and do not expect this to have a significant impact on the
going concern assessment throughout the forecast period. Since performing their assessment,
there have been no subsequent changes in facts and circumstances relevant to the Directors’
assessment of going concern
3. Summary of significant accounting policies
The accounting policies used in preparing the Company financial statements are set out below.
These accounting policies have been consistently applied in all material respects to all
periods presented.
3.1. Share-based payments
The Company operates an equity-settled share-based compensation plan (“PSP”), under which
subsidiaries receive services from employees as consideration for equity instruments (options)
of the Company. The cost related to the subsidiaries’ employees service is treated as investment
value in subsidiaries. The awards represent capital contribution to the subsidiaries as no
payment (except nominal value of ordinary shares) is expected for the equity-settled share-
based payment awarded to their employees.
3.2. Investment in subsidiaries
Investments in subsidiaries are recorded at cost, which is the fair value of the consideration paid.
The cost related to the subsidiaries’ employees service is treated as investment value in
subsidiaries. The awards represent capital contribution to the subsidiaries as no payment is
expected for the equity-settled share-based payment awarded to their employees.
Investments are tested for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised for the
amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of an asset’s fair value less costs of disposal and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash inflows that are largely independent of the cash inflows from other
assets or groups of assets (cash-generating units). Investments that suffered an impairment are
reviewed for possible reversal of the impairment at the end of each reporting period.
3.3. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.
Trade and other receivables
Trade and other receivables are carried at original invoice amount less an allowance for
impairment of these receivables.
For intercompany loans repayable on demand, expected credit losses are based on the
assumption that repayment of the loan is demanded at the reporting date. The borrower situation
is assessed whether it has sufficient accessible highly liquid assets in order to repay the loan if
demanded at the reporting date or, if the borrower could not repay the loan if demanded at the
reporting date, the Company considers expected manner of recovery to measure expected
credit losses.
198
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Notes to the company financial statements continued
Trade and other payables
Trade payables are recognised at their nominal value, which is deemed to be materially the same
as the fair value.
3.4. Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at banks.
3.5. Foreign currency transactions
The functional currency of the Company is EUR.
Transactions in foreign currencies are initially recorded by the Company at its functional
currency rate prevailing at the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are translated at the functional currency spot rate
of exchange valid at the reporting date.
Differences arising on settlement or translation of monetary items are recognised in the profit
or loss account as finance income and expenses. Non-monetary items that are measured in
terms of historical cost in a foreign currency are translated using the exchange rates at the
dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency
are translated using the exchange rates at the date when the fair value is determined.
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:
@
IFRS 17, 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
@
International Tax Reform – Pillar Two Model Rules – amendments to IAS 12
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 31 December 2023 reporting periods and have
not been early adopted by the Company. These standards, amendments or interpretations are
not expected to have a material impact on the entity in the current or future reporting periods
and on foreseeable future transactions.
5. Significant accounting judgements, estimates and
assumptions
There are no significant accounting judgements or estimates applicable to Company’s
financial statements.
6. Investments in subsidiaries
EUR ’000 2023 2022
Opening value 126,306 79,398
Capital contribution to W.A.G payment solutions, a.s. 63,500 45,959
Share-based payments 1,464 949
As at 31 December 191,270 126,306
On 1 July 2022, the Company signed an agreement on voluntary surcharge outside of register
capital with its subsidiary W.A.G payment solutions, a.s amounting to EUR 45,959 thousand.
The surcharge was set off against part of the intercompany loan in Note 7 and 9.
In 2023, there was another surcharge amounting to EUR 63,500 thousand, set off against the
intercompany loan.
The capital contribution relating to share-based payments relates to share-based payments
issued to employees of subsidiary undertakings in the Group. For full details of the Group’s
share-based payments, refer to Note 13 to the consolidated financial statements.
7. Financial assets at amortised costs
EUR ’000
31 December
2023
31 December
2022
Intercompany loans 79,814 —
Total 79,814 —
As of 28 June 2023, the Company signed an amended intercompany loan agreement with an
interest rate of 5.23% p.a. and the borrower shall repay all or any part of the loan together with
accrued interest on a date to be determined by mutual agreement of both contractual parties,
but no later than 30 November 2026. The balance of the loan is therefore classified as non-
current asset.
Strategic Report Corporate Governance Financial Statements 199
EUROWAG Annual Report and Accounts 2023
Notes to the company financial statements continued
8. Share-based payments
Certain Group employees have been granted options over the shares in the Company. Refer to
the accounting of the investment for details on the awards granted and the related accounting
(Note 3).
Share options outstanding at the end of the year are the same as per the consolidated financial
statements. Therefore, we refer to Note 13 to the consolidated financial statements.
9. Trade and other receivables
EUR ’000
31 December
2023
31 December
2022
Intercompany receivables — 147,127
Receivables from tax authorities 259 395
Advances granted 461 358
Prepaid expenses 248 119
Total 968 147,999
As of 3 December 2021, the Company entered into loan agreement with W.A.G. payment
solutions, a.s. Under the agreement, the Company provided a loan facility up to EUR 190 million
repayable on demand, but no later than 30 November 2026. Interest rate up to 30 June 2022
was 1.02 % p.a. On 1 July 2022 following subordination of the intercompany loan to club financing
banks in the consolidated financial statements Note 30, the interest rate was amended to 12M
EURIBOR + margin.
Trade and other receivables are non-derivative financial assets carried at amortised cost. The
carrying value of trade and other receivables approximates their fair value due to their short-
term maturities.
10. Cash and cash equivalents
EUR ’000
31 December
2023
31 December
2022
Cash at banks 476 1,744
Cash and cash equivalents 476 1,744
The fair value of cash and cash equivalents approximates their carrying value due to their short-term maturities.
11. Equity
Shares authorised, issued and fully paid:
Ordinary shares Class B share
Share premium
EUR ’000
Merger reserve
EUR ’000 Number of shares
Share capital
EUR ’000 Number of shares
Share capital
EUR ’000
As at 1 January 2022 688,911,333 8,107 1 30,006 194,763 42,035
Capital reduction
1
— — (1) (30,006) (191,805) —
At 31 December 2022 688,911,333 8,107 — — 2,958 42,035
Issue of share capital
2
560,204 6 — — — —
At 31 December 2023 689,471,537 8,113 — — 2,958 42,035
Notes:
1 On 13 December 2021, the Company allotted from merger reserve one Class B share with no voting rights or rights to distributions or rights to the return of capital on winding up. The share has a nominal value of GBP 25,500 thousand (EUR 30,006
thousand). On 14 December 2021, the High Court of Justice in England and Wales made an order confirming the reduction of the share premium account by GBP 163 million (EUR 191.8 million) and the cancellation of the Class B share. However, the capital
reduction was only registered by Companies House on 8 January 2022, which is the effective date for financial reporting. The distributable reserves arising from the capital reduction and the Class B share cancellation were transferred to retained earnings
in 2022.
2 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 GBP 0.01 per share resulting in EUR 6 thousand share capital increase.
Merger reserve
Merger reserve includes a reserve for the share for share exchange transaction that qualified for merger relief in accordance with section 612 of the Companies Act 2006. The difference between
the investment in W.A.G payment solutions, a.s. and the share capital issued during Group reorganisation was recognised as a merger reserve. The merger reserve is non-distributable.
200
EUROWAG Annual Report and Accounts 2023
Strategic Report Corporate Governance Financial Statements200
Notes to the company financial statements continued
12. Trade and other payables
EUR ’000
31 December
2023
31 December
2022
Trade payables 1,478 5,004
Employee related liabilities 583 168
Intercompany payable 110 952
Total 2,171 6,124
Trade payables are non-interest bearing and are normally settled on 30-day terms. As at
31 December 2022, trade payables were mostly related to the acquisition of Inelo.
Trade and other payables are non-derivative financial liabilities carried at amortised cost. The
fair value of current trade and other payables approximates their carrying value due to their
short-term maturities.
13. Employee expenses
Employee expenses of the Company consist of the following:
For the period ended 31 December
EUR ’000 2023 2022
Wages and salaries 2,992 1,264
Social security and health insurance 390 186
Share-based payments 869 —
Total employee expense 4,251 1,450
Information regarding Directors is included in the Directors’ Remuneration Report on page 118.
The monthly average number of employees by category during the period was as follows:
For the
period ended
31 December
2023
For the
period ended
31 December
2022
General and administrative 12 9
Total average number of employees 12 9
14. Contingent liabilities
The Company has guaranteed Webeye acquisition disclosed in Note 8 to the consolidated
financial statements. The Company has assessed the probability of loss under this guarantee as
remote.
15. Information included in the notes to consolidated
financial statements
Some of the information included in the Notes to the consolidated financial statements is directly
relevant to the financial statements of the Company.
Please refer to the following:
@
Note 2 – Auditors’ remuneration
@
Note 7 – Subsidiaries
@
Note 12 – Key management personnel
@
Note 13 – Share-based payments
@
Note 37 – Related parties
@
Note 38 – Subsequent events
Strategic Report Corporate Governance Financial Statements 201
EUROWAG Annual Report and Accounts 2023
AGM – Annual General Meeting
CDP – Carbon Disclosure Project
CEE – Central and Eastern Europe
CFD – Climate-related Financial Disclosure requirements
CGU – Cash Generating Unit
CNG – compressed natural gas
CRT – Commercial Road Transport
CSR – Corporate Social Responsibility
CSRD – Corporate Sustainability Reporting Directive
DCF – Discounted Cash Flow
DSO – Days Sales Outstanding
EETS – European Electronic Toll Service
eNPS – Employee Net Promoter Score
ERP – Enterprise Resource Planning
ESG – Environmental, Social and Governance
EVA – Enhanced Vehicle Assistant
FCA – Financial Conduct Authority
FRC – Financial Reporting Council
GDP – Gross Domestic Product
GHG – Greenhouse Gas Emissions
HVO – hydrotreated vegetable oil
IoT – Internet of Things
LNG – liquefied natural gas
NCI – Non-Controlling Interest
NPS – Net Promoter Score
OBU – On-Board Unit
OEM – Original Equipment Manufacturer
SaaS – Software as a Service
SLA – Service-Level Agreement
SME – Small and Medium-sized Enterprise
TCFD – Task Force on Climate-related Financial Disclosures
TCO – Total Cost of Ownership
Glossary
Glossary
Strategic Report Corporate Governance Financial Statements202
EUROWAG Annual Report and Accounts 2023
Company information
Registered office
W.A.G payment solutions plc
Third Floor (East),
Albemarle House,
1 Albemarle Street,
London, W1S 4HA,
United Kingdom
Registered in England and Wales
No. 13544823
Registrar
Computershare Investor Services plc
The Pavilions Bridgwater Road,
Bristol,
Avon,
BS13 8AE,
United Kingdom
Company secretary
Computershare Governance Services (UK) Limited
The Pavilions Bridgwater Road,
Bristol,
Avon,
BS13 8AE,
United Kingdom
Internal auditor
KPMG Česká republika, s.r.o.
Pobřežní 648/1a,
186 00,
Praha 8 Česká republika
External auditor
PricewaterhouseCoopers LLP
One Chamberlain Square,
Birmingham,
B3 3AX,
United Kingdom
Joint corporate broker
Jefferies International Limited
100 Bishopsgate,
London,
EC2N 4JL,
United Kingdom
Peel Hunt LLP
100 Liverpool Street,
London,
EC2M 2AT,
United Kingdom
Investor Relations
investors@eurowag.com
Company information
®
®
CBP024131
W.A.G payment solutions plc