H1 2023 interim results: robust growth despite macro pressures, large-scale digital transformation continues
Martin Vohánka, Founder and CEO, commented:
"We delivered strong double-digit organic growth in the first half of the year. This was in spite of the macroeconomic headwinds across Europe which are impacting the Commercial Road Transport (“CRT”) industry through a notable slowdown in freight demand, in turn delivering a reduction in kilometres driven. Our performance against this backdrop continues to demonstrate the resilience of our business model which delivers significant growth through the cycle and that our products are truly mission critical to our customers.
This year we have entered a new transformation phase. Our priority is the integration of our newly acquired businesses to ensure we fully capture the synergies and cross sell opportunities, as well as deliver on our vision of providing the industry’s first end-to-end digital platform next year. Our transformational capex programme, which remains on track to finish at the end of this year, has allowed us to develop and expand our product and service capabilities, strengthen our business operations, and build a unique and scalable technology platform, which we look forward to discussing further at our Capital Markets Day in October.
There is still a lot of work to do, but I am pleased with the progress made so far this year. We have moved closer to the launch of our integrated platform, which, together with the integration of our acquisitions, gives me confidence that we can unlock further value for both our customers and our shareholders.”
H1 financial highlights
- Net revenue1 up 36.9% year-on-year to €119.1m, with organic growth2 of 14.4%.
- Payment solutions revenue1 grew by 14.1% year-on-year to €72.4m, with organic growth2 of 12.5%. Economic headwinds have impacted the CRT industry, with fewer kilometres driven.
- Mobility solutions revenue1 grew 98.6% year-on-year to €46.7m, with organic growth2 of 19.9%; reflecting strong sales across all our mobility products.
- Adjusted EBITDA1 up 43.5% year-on-year to €50.2m, with margin1 of 42.2%, reflecting the impact of acquisitions. Organic adjusted EBITDA1 up 21.6% to €42.6m, with margins at 43.3% (H1 2022: 40.7%); Excluding the benefit from the foreign exchange gain as a result of our prudent currency risk management3, organic adjusted EBITDA was €36.6m.
- Transformational capex of €11.7m and ordinary capex of €12.9m, with our transformational programme on track to finish at the end of the year, in-line with guidance.
- On a statutory basis, profit before tax was €8.5m, a decrease of 36.7% year-on-year; due to higher depreciation from our transformational capital expenditure programme, the inclusion of our new acquisitions, and higher interest costs following the acquisition of Grupa Inelo S.A. (“Inelo”).
- Net debt position of €300.9m (H1 2022: cash position of €28.7m); leverage increased as expected to 2.9x net debt to adjusted EBITDA4.
|
Key statutory financials |
H1 2023 |
H1 2022 |
YoY growth (%) |
|
Revenue from contracts with customers (€m) |
1,017.6 |
1,160.8 |
(12.3)% |
|
Profit before tax (€m) |
8.5 |
13.4 |
(36.7)% |
|
Basic EPS (cents/share) |
0.76 |
1.29 |
(41.1)% |
|
Alternative performance measures 1 |
H1 2023 |
H1 2022 |
YoY growth (%) |
H1 2023 organic2 |
Organic YoY growth (%) |
|
Net revenue (€m) |
119.1 |
87.0 |
36.9% |
98.3 |
14.4% |
|
Payment solutions revenue (€m) |
72.4 |
63.5 |
14.1% |
71.4 |
12.5% |
|
Mobility solutions revenue (€m) |
46.7 |
23.5 |
98.6% |
26.9 |
19.9% |
|
Adjusted EBITDA (€m) |
50.2 |
35.0 |
43.5% |
42.6 |
21.6% |
|
Adjusted EBITDA margin (%) |
42.2 |
40.2 |
+1.9pp |
43.3 |
+2.5pp |
|
Adjusted basic EPS (cents/share) |
2.90 |
2.35 |
23.1% |
1.80 |
(23.7)% |
H1 operational highlights
|
|
H1 2023 |
H1 2022 |
YoY growth (%) |
|
Average active payment solutions customers5 |
18,053 |
16,523 |
9.3% |
|
Average active payment solutions trucks5 |
91,864 |
87,626 |
4.8% |
|
Payment solutions transactions6 |
18.4m |
17.7m |
4.1% |
H1 strategic highlights
- M&A strategy adding key capabilities and services:
- Completed the acquisition of Inelo in March;
- JITpay GmbH’s (“JITPay”) call option exercised in July to buy an additional 18.01%, taking total ownership to 28% once completed.
- Integration of WebEye Telematics Zrt. (“Webeye”) and Inelo:
- Webeye organisation integrated, including moving their sales force into Eurowag as one agile sales team;
- Inelo integration workstreams in place to ensure seamless transition, focus on cross-sell initiatives.
- Grow core services:
- European Electronic Toll Service (“EETS”) certification in the Czech Republic and Hungary.
- Expand platform capability:
- Improving customer self-care portal to support end-to-end digital user experience;
- Continue to develop our financial platform capability, for e-wallet launch in FY 2024;
- Good progress made on data lake to improve data analytics and reporting governance.
Notes:
1. Please refer to the section Explanation of Alternative Performance Measures for a definition and see note 9.
2. Organic growth excludes Webeye and Inelo performance and recurring Inelo integration expenses.
3. We use forward currency contracts to mitigate any Euro foreign exchange fluctuations.
4. Net debt includes lease liabilities and derivative liabilities.
5. An active customer or truck is defined as using the Group’s payment solutions products at least once in a given month.
6. Number of payment solutions transactions represents the number of payment solutions transactions (fuel and toll transactions) processed by the Group for customers in that period.
For more information, please see the full announcement here.