W.A.G payment solutions (EWG) H1 2024 earnings summary

Executive summary

• Net revenue grew 18.4% year-over-year to €141.0m, driven by both organic business and acquisitions, with adjusted EBITDA up 18.2% to €59.4m and a stable 42.1% margin.

• Significant progress on integration and transformation, including people, technology, and data systems, supporting the phased rollout of the Eurowag Office digital platform, with early adopters onboarded and full rollout on track for Q4 2024.

• Mobility solutions revenue increased 31.3% year-over-year, now representing 43% of group net revenues, driven by Inelo's contribution and product expansion.

• Statutory profit before tax fell 50.6% to €4.2m due to higher amortisation, interest, and depreciation, while adjusted profit before tax was €21.6m.

• The Board maintains confidence in medium-term guidance despite macroeconomic headwinds.

Financial highlights

• Net revenue increased 18.4% to €141.0m year-over-year, with both organic and acquisition contributions.

• Adjusted EBITDA rose 18.2% to €59.4m, maintaining a 42.1% margin.

• Adjusted basic EPS decreased to 2.51 cents, down 13.4% year-over-year, due to higher depreciation, amortisation, and finance expenses.

• CapEx was €20.5m, including €3m from the completed transformation program, and was reduced from the prior year.

• Net leverage improved to 2.6x net debt/adjusted EBITDA, with net debt at €302.4m.

Outlook and guidance

• Medium-term guidance reiterated for mid-teens to high-teens net revenue growth and stable adjusted EBITDA margins, with capex expected to normalize at around 10% of net revenues.

• Net leverage anticipated to fall within the 1.5–2.5x range in FY 2025.

• Platform rollout to new customers in Q4 2024, with subscription model launching in Q1 2025.

• Trading in line with Board expectations, with platform delivery underpinning confidence in guidance.