33 slides from W.a.g. Payment Solutions's earnings presentation, Sep 6, 2022
Slide 1: W.A.G payment solutions plc HY 2022 results
W.A.G payment solutions plc HY 2022 results 6 September 2022 Martin Vohánka / Founder and CEO Magdalena Bartoś / CFO 1
Slide 2: Disclaimer
Disclaimer This presentation comprises certain written materials/slides prepared by W.A.G payment solutions plc (the Company) for the purposes of the Company’s investor relations conference. This document, its contents and the presentation may not be copied, distributed, published, reproduced or pas
Slide 3: Today’s Agenda
Today’s Agenda Introduction and Highlights 1 What we do and the opportunity Financial results 2 Delivered resilient performance 3 Strategic Update Delivered progress against our strategy 4 Conclusion Well placed to continue growing 5 Q&A 3
Slide 4: Introduction and Highlights
Introduction and Highlights Martin Vohánka / Founder and CEO 4
Slide 5: Commercial Road Transport sector
Commercial Road Transport sector Vital to the whole Large and growing In need of European economy market for Eurowag transformation 5% 9.1m commercial road transport >90% European trucking of European GDP¹ trucks in Europe² businesses are SMEs 20m CRT related jobs across Europeᵌ ~25% 13% of which ba
Slide 6: Making CRT cleaner, fairer and more efficient
Making CRT cleaner, fairer and more efficient An integrated platform digitalising and connecting the Commercial Road Transport industry Payment solutions Mobility solutions Essential services Digitalising the industry and driving efficiencies Vehicle information Other adjacent Energy payments Toll p
Slide 7: Delivering integrated payment and mobility solutions
Delivering integrated payment and mobility solutions Highly fragmented Big data Digitalisation Growing market industry Digital adoption rate for logistics Addressable market to grow Over 90% of heavy CRT operators Innovative platform gathers Growth service providers is only 13% 300% over coming year
Slide 8: First half 2022 highlights
First half 2022 highlights Net energy and services sales Adjusted EBITDA Adjusted earnings €87.0m €35.0m €16.9 19.4% YoY growth 40.2% margin 11.2% YoY growth Active payment solutions trucks Average net revenue retention 87,626 >110% 7.3% YoY growth 2017-2022 Copyright ©2022 W.A.G. Payment Solutions
Slide 9: Operational highlights
Operational highlights Payment solutions Mobility solutions ▪ Certified and admitted as EETS Germany provider, ▪ Completed WebEye acquisition with cross-sell and up-sell opportunities across both segments. launched operations and strengthened competitive moats. ▪ Introduced hybrid financing for tax
Slide 10: Financial Results
Financial Results Magdalena Bartoś, CFO 10
Slide 11: Highly attractive financial profile
Highly attractive financial profile High revenue Large scale and Proven growth retention and Highly profitable network track record diversification 16,523 12.3% >110% 40.2% Active payment solutions customers CAGR 19-21 Average net revenue retention Adjusted EBITDA margin Active payment solutions 201
Slide 12: H1 2022 Group financial highlights
H1 2022 Group financial highlights ▪ The Group’s net energy and services sales growth at 19.4% with All figures in € million H1 22 H1 21 YoY organic growth of 18.0% YoY. Net energy and services sales 87.0 72.9 19.4% ▪ Growth in payment solutions driven by strong new customer and truck acquisitions a
Slide 13: Adjusted EBITDA bridge
Adjusted EBITDA bridge Inorganic Organic growth Incremental costs growth 45.4% 37.2 37.1 35.1 40.2% +4.1 -0.1 -2.0 Copyright ©2022 W.A.G. Payment Solutions Notes: All figures in € million; differences in totals due to rounding; % Adjusted EBITDA margin 13
Slide 14: Corporate expenses
Corporate expenses Reported Adjusted ▪ Employee expenses increased as the Group focused on All figures in € million H1 22 H1 21 YoY H1 22 H1 21 YoY priority hires, talent retention, strengthening the structure and remuneration schemes appropriate for a listed company. Employee expenses 32.8 26.5 23.
Slide 15: Capital expenditure
Capital expenditure Expanding customer capabilities Ordinary High single digit Capex % Net 4% 7% 5% 8% % of net revenue ▪ Mobile payments Revenue(1) ▪ Improved customer experience and security 33.3 €50m cumulative for 2022-2023 ▪ End-to-end customer digital journey 19.9 ▪ Online onboarding, automate
Slide 16: Cash flow bridge
Cash flow bridge Tax refund working capital movements (18.0) Inventories (9.3) Other working capital movements 18.8 Copyright ©2022 W.A.G. Payment Solutions Notes: All figures in € million; differences in totals due to rounding 16
Slide 17: Capital allocation principles
Capital allocation principles Investment in Disciplined Robust Balance Prioritise growth Business for Strategic M&A Sheet over dividends Organic Growth ▪ End-to-end integrated ▪ Looking at accretive ▪ Financial strength providing ▪ No intention to declare ecosystem acquisitions strategic flexibility
Slide 18: Current trading and outlook
Current trading and outlook ▪ The Group has performed in line with management expectations ▪ Eurowag has continued to respond pro-actively to emerging risks and year-to-date. opportunities, supported by: ▪ Business is demonstrating resilience and adaptability despite ▪ Strong pan-European network; s
Slide 19: Summary financial guidance
Summary financial guidance ▪ Organic net revenue growth between high teens and low twenties over the medium term Net revenue ▪ Expect both payment solutions and mobility solutions to grow at a similar pace over the medium term growth ▪ Adjusted EBITDA margin from mid forties trending to high forties
Slide 20: Strategic Update
Strategic Update Martin Vohánka / Founder and CEO 20
Slide 21: Supportive market trends
Supportive market trends Digitalisation of Rise of integrated Expanding road Push towards net the CRT industry solutions mobility market zero The digital adoption rate for Businesses are looking for Total transaction value of There is increasing pressure from logistics services providers is at integ
Slide 22: Five drivers of sustained long-term growth
Five drivers of sustained long-term growth Growth Geographic Go-to Digital Accretive from existing expansion market channel platform M&A customers and penetration expansion development Industry tailwinds Consolidating market shares Digital, telesales and field Fully digital end-to-end ecosystem Prov
Slide 23: Acquisition of WebEye
Acquisition of WebEye ▪ A highly strategic and accretive acquisition, completed on 1 Jul 2022. Over Strong presence in ▪ Expands the customer base on our payments and mobility Leader in CRT Fleet core markets platform, with significant opportunities for cross-sell and up- Management Solution 58,000
Slide 24: Dynamic growth engine
Dynamic growth engine Customer / Driver information Trucks and trailer information Payments and transactions data Destination and routing info Geo-localisation Tax refund Behaviours data Powerful cross-selling platform driven by data and customer-centricity Copyright ©2022 W.A.G. Payment Solutions 2
Slide 25: Responsibility and sustainability
Responsibility and sustainability Key developments in 1H: ESG targets Reduce direct emmisions by Increase female representation ▪ Joined new consortium to advance Hydrogen for CRT industry. in leadership roles to ▪ Commissioned customer research in 9 European markets to 50% 40% identify and improve
Slide 26: Key takeaways
Key takeaways 1 Strong and resilient financial performance 2 Robust balance sheet 3 Delivering long-term growth across five strategic pillars 4 Large and growing market Navigated uncertainty with confidence and 5 reaffirm medium-term guidance Copyright ©2022 W.A.G. Payment Solutions 26
Slide 27: Q&A
Q&A investors@eurowag.com Copyright ©2022 W.A.G. Payment Solutions 27
Slide 28: Appendix
Appendix 28
Slide 29: Revenue model
Revenue model Payment solutions Mobility solutions Re-occurring transaction-based revenue streams Re-occurring transaction, recurring subscription and other fee-based revenue streams Vehicle information Other adjacent Energy payments Toll payments Tax refund Smart routing (Incl. telematics) services
Slide 30: Payments and mobility services ecosystem
Payments and mobility services ecosystem PRIOR TO JOURNEY ON THE ROAD POST DELIVERY Our services Energy payments | Smart routing and driving assistant | Tax refund | Aftersales Digital freight | Route planning Customer self-care | Toll payments | Incidental spend Road Lords | Insurance | Consulting
Slide 31: Maximising returns through M&A & innovation
Maximising returns through M&A & innovation Strategic growth investments in Acquisition of LMS, Drivitty and KomTeS EVA Princip integrated eMobility platform Vector - first payment tool Acquisition of on-board-unit New enhanced vision Sygic and ADS acquired for freight forwarders for the business in
Slide 32: Comprehensive go-to-market strategy
Comprehensive go-to-market strategy Multi-channel sales strategy BUILDING BECOMING ONBOARDING A RELATIONSHIP A TRUSTED PARTNER Full control of the client acquisition process - direct “pitching”, on- Digital campaign Data analytics to build rich picture of customer activity boarding, sales and post-s
Slide 33: Differentiated integrated CRT offering
Differentiated integrated CRT offering International oil Fuel card issuers Telematics and Eurowag is a comprehensive network companies and single and other truck Fleet Management Logistics built to serve the CRT industry product providers service providers providers brokers / DFF Integrated - bind c