W.A.G payment solutions (EWG) H2 2023 earnings summary

Executive summary

• FY23 delivered 14.5% organic net revenue growth and 12.2% organic Adjusted EBITDA growth despite macro headwinds; integration and digital-platform investment advanced.

• The €56.7m goodwill impairment drove a reported loss before tax of €39.3m, while Adjusted profit before tax rose 3.4% to €56.7m.

Financial highlights

• Net revenue rose 34.4% to €256.5m; organic growth was 14.5% to €218.6m, with acquisitions contributing to reported growth.

• Adjusted EBITDA increased 33.2% to €108.7m; organic growth was 12.2% to €91.5m. Adjusted EPS rose 12.8% to 6.49p.

• Adjusted profit after tax was €46.7m; reported loss after tax was €44.0m, reflecting €96.0m of adjusting items, including impairment.

• Capex was €50.9m, including €21.7m for the transformational programme.

Outlook and guidance

• FY24 net revenue growth expected in the mid-teens, with market headwinds; medium-term growth expected to return to high teens as platform value and acquisition synergies build.

• FY24 Adjusted EBITDA margin expected in line with FY23 at ~43%; medium-term margin target is the high 40s.

• Ordinary capex expected to reach ~10% of net revenue, reflecting higher contributions from Inelo and Webeye.

• FY24 leverage expected moderately above target, including ~€35m deferred consideration; target is to return to 1.5x–2.5x in FY25.

• Digital platform soft launch remains on track for Q4 2024, with selective fuel, telematics and toll customer migration planned for Q2/Q3.