Eurowag affirms 2023 margin outlook after "solid" first nine months

(Alliance News) - WAG Payment Solutions PLC on Tuesday backed its 2023 outlook, shaking off "macroeconomic headwinds".

WAG, also known as Eurowag, also affirmed that revenue growth will moderate going forward, as the toll and fuel payments platform undertakes a "transformative programme".

Eurowag said net revenue in the nine months to September 30 was 36% higher year-on-year at EUR183.7 million. Organic revenue rose 17%.

"I am pleased to report that the group delivered a solid performance in the first nine months of this year, once again demonstrating the resilience of our business model as well as the mission critical nature of our solutions. Our strong double-digit organic growth was achieved despite the macroeconomic headwinds across Europe impacting the [commercial road transport] industry through a slowdown in freight demand, and therefore fewer kilometres driven," Chief Executive Officer Martin Vohanka said.

Looking ahead, Eurowag expects near-term revenue growth in the "mid-teens", easing from what it has achieved so far in 2023. This is due to "macro-economic headwinds and the magnitude of the transformative programme".

"In the medium-term, we expect the net revenue percentage growth to return to high-teens, reflecting the value creation from our platform through the growth in customers, the cross-sell opportunities, and the full extraction of acquisition synergies," Eurowag added.

In 2023, it still expects its margin level to be in line with 2022's, "around 43%".

"We still expect our margin in the medium-term to improve to high-forties, as operational leverage and acquisition synergies are realised," it added.

Shares in the company were 0.2% higher at 95.00 pence each in London on Tuesday morning.

By Eric Cunha, Alliance News news editor

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