H1 2022 interim results: delivering strong and resilient growth
Financial highlights
The Group achieved strong half-year results with growth in line with mid-term financial guidance.
- Net energy and services sales1 up 19.4% year-on-year to €87.0m, with organic growth1 of 18.0% year-on-year;
- Payment solutions1 grew by 17.2% year-on-year to €63.5m, while mobility solutions1 grew 25.7% year-on-year to €23.5m;
- Adjusted EBITDA1 up 5.7% to €35.0m resulting in adjusted EBITDA margin of 40.2% impacted by incremental PLC costs and WebEye consolidation;
- Adjusted EBITDA margin1 on a comparable basis, excluding WebEye consolidation, incremental PLC costs would be 43.3%;
- Significant progress on transformational capital expenditure1 plan with €13.3m spent, in line with mid-term guidance set at the IPO;
- Net cash1 position of €28.7m (gross cash of €181.5m) as at 30 June 2022 providing for significant leverage headroom to take advantage of strategic opportunities.
Growing scale and network within a high-quality payments-oriented business model and highly diversified revenue base, underpinned by strong net energy and services sales growth.
- Average active payment solutions customers1 up 13.0% year-on-year to 16,523;
- Average active payment solutions trucks1 up 7.3% year-on-year to 87,626;
- Payment solutions transactions1 up 8.6% year-on-year to 17.7m;
- Net revenue retention1 for the last five years over 110%.
| Key statutory financials | 6M2022 | 6M2021 | YoY |
| Revenue from contracts with customers (€m) | 1,160.8 | 784.4 | 48.0% |
| Profit before tax (€m) | 13.4 | 12.4 | 8.1% |
| Basic EPS (cents/share) | 1.29 | 1.53 | (15.7%) |
| Alternative performance measures | 6M2022 | 6M2021 | YoY |
| Net energy and services sales (€m) | 87.0 | 72.9 | 19.4% |
| Adjusted EBITDA (€m) | 35.0 | 33.1 | 5.7% |
| Adjusted EBITDA margin (%) | 40.2 | 45.4 | (5.2 pp) |
| Adjusted basic EPS1 (cents/share) | 2.35 | 2.57 | (8.6%) |
Strategic and operational highlights
- Successfully managed volatile environment in fuel supplies (shortages, surging fuel prices, changing regulations) and increased resilience of the business.
- Completed the acquisition of substantially all of the assets of WebEye Telematics Zrt. ("WebEye"), a leading fleet management solutions provider in Central and Eastern Europe, broadening the Group’s customer base (non-Hungarian subsidiaries acquired on 16 May 2022 and Hungarian subsidiaries acquired on 1 July 2022).
- Expanded our acceptance network with a focus on LNG to support the energy transition and decarbonization of the CRT industry. The total number of contracted LNG stations rose to 304, representing more than 50% of the European market.
- Continued to strengthen our competitive moats by completing trial operations for EETS in Germany, the largest tolling market in Europe, resulting in the signing of the final admission by the German Toll Charger and going live. Germany represents the biggest share of toll transactions volumes across our business.
- Simplified settlement and improved security by activating mobile payments on all owned truck parks, as well as in the acceptance network resulting in 388 POS ready for mobile payment.
- Expanded the senior leadership team through key hires in the product and technology area to accelerate digital platform development.
- Tax refund has become more flexible adapting to several regulatory changes in the legal framework across the EU countries. Our consulting services help clients navigate through additional complexity from the reciprocity agreements with countries outside the EU territory.
- RoadLords app is now installed on more than 3m mobile devices across Europe with the active installation base reaching 600k drivers during the H1 2022. Engagement of the regular users/drivers increased by 25%.
- Expanded the automation of credit scoring mechanism, allowing us to benefit from the digital client journey and tailor customer credit limit requirements.
- Joined new consortium to advance Hydrogen for the CRT sector and engage across the eMobility sector to promote standards for e-Trucks.
Outlook
The Group has performed in line with management expectations year-to-date. Looking ahead, we estimate organic net energy and services sales for Q3 2022 of at least €44.5m which would represent strong LTM growth in excess of 19.0% year-on-year. In addition, Webeye’s contribution to the top line for Q3 2022 is expected to be at least €3.5m.
During the first half of 2022, fuel supply risks and macroeconomic conditions have deteriorated, with inflation and higher fuel prices moderately impacting the Group’s operations and operating expenses. Despite these challenges we expect to deliver a resilient full year performance, with Adjusted EBITDA for the year-to-date developing in line with expectations. While inflation, the post Covid-19 cost rebase and additional PLC costs continue to impact our profitability, we expect these incremental costs will be offset by the profit delivered from WebEye in the second half of the year.
Whilst the business has navigated with confidence through the challenging environment, the Directors note elevated risks and uncertainties with respect to the future of the European economy, and potential impacts of the sanctions related to imports of Russian oil introduced by the European Commission. Notwithstanding these headwinds, and assuming no significant worsening of the current environment, we remain confident in our future outlook and reaffirm our mid-term guidance.
Martin Vohánka, Founder and CEO, commented:
“Along with many other businesses across Europe, Eurowag has had to adapt to unprecedented circumstances over the past six months. Still, the Group has delivered a strong set of results, demonstrating the resilience of our business model, and highlighting the importance of our services to the CRT industry.
I am particularly pleased that we completed the WebEye acquisition and established a public market track-record of delivering value-accretive strategic M&A. Eurowag can now offer integrated payment and mobility solutions to significantly more customers across our core markets, and capitalise on the data from even more connected trucks to help our customers run their businesses more efficiently.
We continue to strengthen our senior leadership team with appointments in the product and technology areas, to accelerate the digital platform development. Our strong performance in the first half would not have been possible without the commitment of our people, so I would like to say thank you to all our employees.”
Magdalena Bartoś, CFO said:
“Eurowag traded strongly in the first half and delivered significant organic growth in net revenue and adjusted EBITDA. Our business continues to grow scale, evidenced by the increasing number of active trucks using our payment solutions, and the expanding customer base provides more opportunities for effective cross-selling, which improves loyalty and drives revenue retention. Our robust balance sheet, which remains in a net cash position, provides significant headroom to further invest in our platform.
Looking ahead, whilst there continues to be a high level of uncertainty, our expectations for the full year of 2022 remain unchanged and we anticipate delivering results in line with our mid-term financial guidance. With a clear strategy, we believe Eurowag is well positioned to capitalise on further growth opportunities and will continue delivering sustainable long-term value for all our stakeholders.”