Eurowag reports sustained growth as it completes investment phase

(Sharecast News) - WAG Payment Solutions, trading as Eurowag, reported sustained robust growth across its products and services in its preliminary results on Tuesday, meeting expectations for 2023. The FTSE 250 company said total net revenue jumped 34.4% to €256.5m, driven by organic growth of 14.5%.

Payment solutions saw 9% increase to €147m, attributed to a rise in active payment customers and toll revenues.

Meanwhile, mobility solutions soared 95.6% to €109.5m, with organic growth of 28.3%, bolstered by effective cross-selling and strategic original equipment manufacturer (OEM) partnerships.

Adjusted EBITDA climbed 33.2% to €108.7m, with organic growth standing at 12.2%, and an adjusted EBITDA margin of 42.4%.

The firm said adjusted profit before tax reached €56.7m, while the statutory loss before tax amounted to €39.3m, primarily due to amortisation from acquired intangibles, finance costs, and a non-cash goodwill impairment of €56.7m.

Eurowag completed an intensive investment phase in the year, highlighted by the acquisition of Grupa Inelo, enhancing its scale and product capability.

The board said the acquisition led to an increase in net debt to €316.8m, with net leverage standing at 2.9x net debt-to-adjusted EBITDA.

Total capital expenditure amounted to €50.9m, with the transformational programme largely completed and aligned with guidance.

Eurowag said it was also progressing with developing an industry-first digital platform, with a soft launch expected in the fourth quarter of 2024.

Despite prevailing macroeconomic challenges, the group said it maintained confidence in the medium-term value creation from its platform and acquisition synergies, keeping its guidance unchanged.

"2023 was a year of both significant strategic and financial transformation for the group, where we completed our largest ever acquisition and delivered further organic growth, despite a range of macroeconomic headwinds across Europe," said founder and chief executive officer Martin Vohánka.

"Whilst these headwinds are expected to persist in 2024, I am confident in the positive outlook for the group, thanks to substantial investments we have made in the business and in our market positioning.

"Eurowag sits at the heart of the European CRT industry, providing a range of critical services that drive increased efficiency and profitability for customers who operate in a highly complicated, admin heavy sector. With only a small proportion of road transport companies having embraced digitisation to date, there is huge potential to grow our customer base."

Vohánka said that would be accelerated with the launch of its "industry-first" digital platform later in the year.

"Consequently, we remain confident in the prospects for the group and reiterate our near and medium-term financial guidance, as we unlock further value for both our customers and shareholders."

At 0943 GMT, shares in WAG Payment Solutions were down 1.41% at 69.8p.

Reporting by Josh White for Sharecast.com.