Good day, ladies and gentlemen, and welcome to Eurowag 2023 full-year results announcement, W.A.G Payment Solutions plc . At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session through the phone lines, and instructions will follow at that time. Participants can also submit questions through the webcast page by using the "Ask a Question" button. I would like to remind all participants that this call is being recorded. I will now hand over to Martin Vohánka, founder and CEO at Eurowag, and Oskar Zahn, CFO, to present the results. Martin, please go ahead.
Good morning, and thank you for joining us for our 2023 full-year results today. I'm joined by Oskar Zahn, our CFO, who will take you through our financial review in a minute, but first, a few words from me. Eurowag, in spite of the challenging macro environment we saw last year, delivered a robust set of results in 2023, growing organic revenues at mid-teens and in line with the market expectations. I'm proud of our teams, not only for delivering these results but also for completing one of our largest acquisitions in history, company Inelo, with integration very much underway. We have a lot of strategic priorities focused on integration and transformation of our business, but they all assist the development and launch of our integrated platform, which is still on track to launch later this year.
I'm happy to say that we made significant progress last year, and some of the highlights for me include the following: the 3 OEM partnerships we signed opened a new sales channel for us, which will support our sales coverage and connect us with new customer pools. Next, we have done a lot with the integration of WebEye and Inelo. I will talk about this more in detail later. The third is our customers move to more a digital user experience, and ahead of the platform launch, we have invested into our Eurowag application, which will be an extension of the platform. And as you can see, the users have increased by over half of this year to almost 32,000 users per month. The next point is that I'm very proud of our toll business.
We have invested a lot of time and money here, and we are now starting to see the fruits. We've received EETS certification in Czech Republic, Slovakia, Spain, and Portugal, and now we have licensed in 10 countries. This means that our customers can pass through 23 European countries using Eurowag toll solution. We have also had great success with our new cross-selling acquisitions, which make our EVA sales increase 6 times to 23,000 units last year. Finally, there are 2 technology capabilities which are important for the new platform. One is e-wallet, where customers will have their majority of their business financial needs supported. The second is our internal SAP system, which will be the core financial system for the platform. I'm glad to say we have made good progress on both. SAP went live in January this year.
As it is usual with implementation of such large systems, we have a number of following long-term planned releases ahead of us. All in all, we are very happy with our progress, but still certainly a lot to do. I will go through our strategic update in more detail later, but now I would like to hand over to Oskar, who will walk you through our financial performance. Thank you.
Thank you, Martin, and good morning to those who are joining us this morning. As Martin has already mentioned, we are very pleased to share with you today a robust set of results despite the macro headwinds we're facing across Europe. Let me take you through some of the key highlights before moving into the details. Our net revenues increased by 34.4% to EUR 256.5 million in the year, driven by organic growth of 14.5% and the impact of the recent acquisition of Inelo, which completed mid-March. Adjusted EBITDA as a result of our net revenue growth grew 33.2% to EUR 108.7 million, or 12.2% organically, and we've maintained margins in line with the last year at 42.4%. Adjusted earnings per share improved by 12.8% to GBP 0.0649.
Looking at our investment into the business, we spent EUR 50.9 million of CAPEX, of which EUR 21.7 million was on our transformational program, taking the cumulative spend of the program to EUR 47.2 million, with the remaining EUR 3 million to roll into FY 2024 to complete the program. As expected, following the Inelo acquisition, our net debt increased to EUR 316.8 million at the year-end, taking our leverage to 2.9x net debt to EBITDA. Our priority remains to bring this back in line with our medium-term guidance of 1.5x-2.5x. Our net revenue growth was supported by strong organic mobility net revenues of 28.3% and high single-digit growth from payments. Payment solutions grew 9.7% to EUR 147 million, supported by the growth in toll revenue and 8.4% growth in active customers.
The slowdown in revenue growth is driven by the economic headwinds in Europe, which is impacting freight demand, and as a result, we see our customers driving less kilometers. With this backdrop, we still managed to deliver robust growth, reflecting our resilient business model and once again confirming that our products are truly mission-critical to our customers. With the contribution from our recent acquisitions, we saw mobility net revenues almost double to EUR 109.5 million. Mobility solutions now represent 43% of total net revenue, and we expect this to grow to approximately 45% with the full annualization of Inelo. This is an important change to our revenue mix, especially as most of our mobility business is subscription-based, and as previously reported, it is our ambition to move the majority of the Eurowag business onto this model. Adjusted EBITDA grew 33.2% to EUR 108.7 million, with margins of 42.4%.
I'll talk about EBITDA shortly. If we move below the EBITDA line on the income statement, our adjusted profit before tax grew 3.4% to EUR 56.7 million. The underlying growth was impacted by the higher debt and therefore higher interest costs. To show underlying performance, we report on an adjusted basis. There are two items worth mentioning: amortization of intangible assets and goodwill impairment. Both are non-cash adjustments, but let me move to the next slide to give you further color. As a result of the Inelo acquisition, our acquired intangibles increased by EUR 301 million in the year. As we amortize these intangibles over a short period, the amortization charge grew from EUR 22.2 million in FY 2022 to EUR 43.4 million in FY 2023. We're also required on an annual basis to test our goodwill for impairment.
I have a slide with more details on this later, but I wanted to show that even after our impairment of EUR 56.7 million, we still have EUR 266 million of goodwill on our balance sheet at the end of the year. The other noticeable change this year, which I have already mentioned, is our higher debt position following the acquisition of Inelo, which has impacted on our interest costs, which in themselves have increased by EUR 14 million. The last point to note on the balance sheet is that we have written down the fair value of our JITPAY investment from EUR 14.4 million to nil. This was a reflection of the performance in the second half of 2023. Following the announcement last month, we continued to work with JITPAY and their other shareholders to work through their operational performance issues.
This is the first time we're showing you this slide with the different products and the absolute contribution to growth in the year. As you can see, we have significant growth contributions from the majority of our products this year. You can see Inelo's contribution this year on the right side of the chart. If we had acquired it at the start of the year, it would have contributed over EUR 47 million. As I already mentioned, EBITDA, including our acquisitions, increased by 33.2% to EUR 108.7 million. Taking out our acquisitions and looking at the legacy business, EBITDA grew 12.2% to EUR 91.5 million. You can see from the chart, we report other operating income of EUR 8 million, which is the realized FX gains as a result of our prudent risk management.
We called this out at the half-year where the majority of this was recognized, but as a reminder, our objective is to reduce the currency exposure for purchases of fuel, employee expenses, and other operating expenses. Our intention is to manage the costs, not pursue financial gains. There were a few factors that impacted growth and our margins, the first being our investment in people, where we see organic employee expenses and technology expenses increasing by 22% and 36% respectively. Almost a quarter of the increase in employee expenses was due to the salary increases, bonuses, and senior hires to ensure we attract and retain the right talent to support the business through the next phase of our transformation. Growth in technology expenses reflect the group's focus on technology transformation, cloud transition, and the implementation of our new ERP system.
It should come as no surprise with the current economic backdrop that our customers have come under pressure, not only with fewer kilometers driven but high interest and inflation rates, which in our industry can lead to bankruptcy very quickly given the small margins they operate on. You can see our credit losses have increased in the year because of this. Please note that we measure these losses against gross revenues, and the ratio has increased from 0.1% to 0.3%. The group continues to apply rigorous credit loss controls to manage this risk, and as a result, approximately 74% of its receivables portfolio balance was current at the end of the year, similar to the previous years.
Our overall EBITDA margin of 42.4% was, in addition to the higher credit losses, negatively impacted by WebEye, where integration is ongoing and costs are not proportional to our legacy Eurowag business, and positively impacted, as expected, by Inelo. Before I move to our cash flow side, I wanted to briefly walk through the goodwill impairment accounting treatment. A very boring accounting slide, but I wanted to be clear on the reason for the impairment. You are well aware of the rationale for the acquisition of Inelo. Its fleet management solution and work-time management solution is an important addition to our new platform, and its 600 workforce brings new and complementary talent to Eurowag, mainly in tech and product. As you have seen from the earlier slides, Inelo has made a meaningful contribution to our results this year, and we are delighted with the acquisition.
Each year, we are required to do an impairment test on our goodwill. This year, our initial goodwill was EUR 322.7 million, of which EUR 171.8 million was for Inelo. On assessing the cash flow projections over the next five years for the FMS CGU, we took into account three factors: current market conditions, particularly Poland, where the majority of Inelo revenues are delivered, stage of integration into the group, expected revenues from cross-sell. Taking into account these three factors, we made two adjustments: one, the revenue growth assumptions, taking into account the macro conditions, and two, we adjusted our cost synergy assumptions to reflect the high investment in systems and related costs. This year's test resulted in a carrying value of the FMS CGU being EUR 52.2 million less than the fair value and hence the impairment charge.
There was also an impairment charge of EUR 4.5 million related to the tax refund and toll CGUs. These are non-cash adjustments and are recorded on the income statement as adjusting items, reducing profit before tax, and hence impacting our EPS. As the slide suggests, 2023 has been a record investment year at Eurowag, both organically and inorganically, and can be seen in our finance and investing activities. Our borrowings and investment in M&A mainly relates to the acquisition of Inelo. You can also see our organic investment in CAPEX, which I'll outline on the next slide. On the left-hand side, we had around EUR 102 million of cash from operating activities before taking into account working capital, interest, and tax.
Profit before tax on the slide excludes the non-cash goodwill impairment mentioned earlier, as well as other non-cash adjusting items such as depreciation and amortization, interest expense, and impairment loss on financial assets. As previously reported, our working capital can swing in any direction on a daily basis and based on our gross revenues, which was EUR 2.1 billion this year. We have a slide in the appendix which shows working capital over a 12-month period and is a better reflection of our working capital management. Looking at working capital as of the 31st of December, we had a negative swing of EUR 44.4 million, mainly related to timing of certain payments at the end of 2022 and changes to payment terms in Spain, where we saw competitive pricing from smaller fuel suppliers with shorter payment terms.
Finally, as I mentioned before, interest costs have increased due to our higher debt, but also over EUR 3 million of this cost increase relates to our Euribor exposure from factoring of receivables. Moving to CAPEX on the next slide. We spent EUR 50.9 million in CAPEX this year. The increase, as you can see, is firstly from the acquisition of Inelo of EUR 8.6 million and secondly from our organic ordinary CAPEX, which increased slightly due to the higher CAPEX to net revenue ratio at WebEye due to their higher investment in onboard units. As we outlined at the half-year, Inelo and WebEye both have a high requirement for hardware, and our CAPEX mix has changed with 29% of our ordinary CAPEX spend on onboard units, and therefore our CAPEX to net revenue ratio has increased to 11% for the full year.
We can see in the light blue-purple box, our transformational CAPEX program is largely complete with EUR 47.2 million spent over the last two years. We anticipate the final EUR 3 million, which takes us to the total spend of EUR 50 million as previously guided, to roll into FY 2024. Going forward, we will expect our ordinary CAPEX to be around 10% of net revenues. I won't go through all the tech investments we've made, but on the right of the slide, we've categorized them by each layer of our platform. You can see we have invested in the front-end, so the user experience, and Martin will talk more about this later and show you examples of what the Eurowag app looks like today. We've also invested in building some of our own products, with EETS being a great example.
And finally, there has been a lot of investment in the data platform, which is important not only for the new platform but to us as a business. As mentioned at the Capital Markets Day, we will start to report different KPIs aligned to the new platform. This data platform provides these reporting capabilities. Today, we confirm that our medium-term guidance remains unchanged. We anticipate that in the near term, net revenue percentage growth to be around mid-teens. However, we believe the value creation from our platform and full extraction of the acquisition synergies over the medium-term net revenue will return to high teens growth. As I've already mentioned, full-year adjusted EBITDA margins are expected to be in line with FY23 at around 43%, and over the medium-term, we still anticipate margins to trend to high 40% as operational leverage and acquisition synergies are realized.
We expect to keep our capital expenditure at around 10% of net revenues, with a focus to reduce duplications across IT, hardware, and technology processes over time. As a result of the deferred consideration payments expected this year of around EUR 35 million, which is less than guided at the Capital Markets Day mainly due to JITPAY, and the additional incremental facility we've utilized last year, we anticipate our net debt leverage to be moderately above our 1.5-2.5 times range at the end of FY 2024 and will fall within the range in FY 2025. I will now hand you back to Martin.
I wanted to remind you about the industry in which we operate and why it makes sense for Eurowag to be at the center of the commercial road transport and how we can help make this industry clean, fair, and efficient.
As a reminder, this industry is incredibly fragmented in more ways than one. Around 90% of carriers are small SMEs with an average of seven trucks in their fleet. Every journey requires 30-plus administrative tasks. Because they are not fully integrated digital platforms yet on the market, only 13% of companies are being digitized, not surprisingly, mainly the large companies. With regulation increasing, small SMEs are struggling to keep the pace with reporting and general administration. Finally, lack of digitization and connectivity in the industry means that 30% of trucks on the roads are empty with heavy environmental impact. With Eurowag being at the heart of the industry means we create the first digital platform which enables customers to be more efficient, grow revenues, improve their cash flow, and decarbonise.
Eurowag started on this digital journey only a few years ago, where we started to accumulate specific data-driven capabilities from which we could start to construct this platform. We did this either by building and developing our own products, or where we saw a quicker route to market and cheaper, we acquired. You can see all brands we acquired since 2017 on the left. Last year, we completed the largest acquisition, Inelo, which will bring fleet management solution and work-time management solution into a new platform, which is an important tool addressing new labor and safety regulation in Europe. With every acquisition, there was some form of integration, but what was important was that we started to invest in the tech and data foundations in which these products would sit with unified branding, user experience, streamlined workflows, and much simpler bundled pricing.
Such an integration also supports the development of different sales channels as customers are more and more ready for omnichannel experience. Oskar has already covered this. Our large CAPEX transformational program was necessary, as I have just outlined, to ensure we brought all these different pieces together. Once the platform is launched at the end of the year, we can begin to truly see the value creation of our efforts over the last few years through accelerated cross-sell and a number of trucks connected to the platform. As you can see from this chart, we have already been able to capitalize on our acquisitions with high single-digit growth in both customers and trucks last year. But looking back further, we have increased our customer base by almost 40% over the last three years.
We have been able to cross-sell mobility products and services into our fuel cards and toll customer base and vice versa. You can see the results on the right chart. We have experiences with cross-selling, but so far it has been done all only by our direct sales team, which makes up over 600 colleagues across 19 markets. The launch of the platform will only accelerate our ability to cross-sell faster and allow us to expand into new territories through digital means. As I have mentioned at the beginning of this presentation, one of the areas of focus is integration of WebEye and Inelo. Following these acquisitions, our organization has almost doubled in size, and this, of course, comes with unique opportunities as well as challenges. However, I am pleased at the progress we made last year and continue into 2024 with great momentum.
We have gained some new skill sets from both acquisitions, particularly in technology and digital product. We have taken some senior leaders in Inelo and integrated them onto a group level. An example is that we have split the Chief Product Officer role into two, given the importance, and have appointed an Inelo senior leader as Chief Product Officer but focused on operations together with Martin Strigač , which you know, who will be more focused on strategy. We are now fully ready and committed to deliver our new platform at the end of the year. The sales teams are now also fully integrated into one agile sales team with the same objectives, same remuneration to maximize our cross-sell opportunities and acquiring new customers.
I won't stay on this slide for long, as most of you will be familiar with it, but just a reminder of the different layers of our platform and who are the main users. As you can see on the top, we have owners, dispatchers, and truck drivers all needing a different digital user experience and utilizing different products either before a journey on the road or after a journey. These are the key users of the platform. I have talked about the different sales channels with direct sales being the majority of our sales today, but we have made progress on our digital and indirect, and therefore our focus for this year is about bringing these together into an omnichannel approach. We continue to work closely with our OEM partners to pave a new way of selling our products and the new platform when available.
I do not need to talk about our products and services, but the final layer, which is the most important, is the technology and data layer. Oskar has already mentioned our investment here, but this is where I wanted to highlight the unique set of data Eurowag now captures. The data we collect covers every single touchpoint of our customer journey, from real-time visibility of fleets to post-journey administration tasks, including information relating to our customer's customer. All of this data will not only enable us to improve our products and services but will address the clear inefficiencies in the CRT industry. We are building an industry-first data platform which will not only transform our business but also our customers, which leads me nicely into this slide. What you see on the screen are live features of our Eurowag mobile app today.
We have been developing our app for the last two years, and this will evolve to reflect the platform once it's alive. You can see customers can already use payments, fleet management solutions, and our work-time capability, which will be upgraded when we can integrate Inelo into the application. The development in the app last year means the numbers of users increased by almost 60%, and we have now around 32,000 monthly average users. This is great evidence of the hunger our customers have for digital solutions, simplifying their operations and improving efficiency. As we add more capabilities, we are confident the number of users will increase. And of course, the launch of the new platform shall accelerate the take-up of users too. I'm glad to show we have made progress since we shared this slide at the Capital Markets Day last October.
Q4 last year was a baptism by fire for our product and tech teams. I've tried to demonstrate the milestones in line with the layers of the platform. At the front-end, we have mapped the first customer journeys, designed the digital touchpoints for onboarding, and we've prepared a new business and pricing model. As we look out into this year, it's taking the designs and moving it into development, integrating, and continuously testing. And from Q2 and Q3, we will start to migrate some of our existing customers onto the platform so we can really test, adapt, and be ready for our soft launch in Q4. As I have already mentioned, collaboration with our truck manufacturers, OEM partners, is ongoing. With regards to all our products, we need to create product modules before we can integrate them into the front-end, and this has already started.
The launch of our new ERP system, I have already mentioned, this is a critical piece of our platform as it forms our core financial system and allows us to scale with modern technology. Our data platform will continue to evolve, and we will need to migrate customers' data into one place, including WebEye and Inelo data. So as you can see, we have made great progress. We still have lots to do, but I'm very confident with our launch of the platform in Q4 this year. I'd like to show this slide as it continues to endorse why we are so determined to succeed at delivering this platform. By creating our end-to-end digital platform, we are improving processes that are unnecessarily complicated.
Drivers should be able to wake up and start their journey without having to worry where their next load will come from, where or when they will stop along the way to fuel or rest. Our aim is to make the end-to-end journey as easy and painless as possible. Our payment solutions will simplify the payment process, allow cost savings, and improve working capital. Our mobility solutions will improve efficiency in the back office as well as on the road. As these come together in a single platform, we'll be able to add further value. Lastly, let's not forget that 9% of EU carbon emissions are generated by the CRT sector, and Eurowag is well placed to help reduce this through improving truck utilization and other products, which nicely leads me to my final slide. We are committed to improving our environment.
We are committed to make the industry attractive again and support the communities in which we operate. We are in control of all these with the added benefit of helping our customers reduce their emissions. We have tools to help them. This could be to improve drivers' behavior, better routing, or utilization of their trucks. Over time, we can support our customers' transition to clean alternative fuels as soon as they are available. To sum up, we had a resilient 2023 achieving robust double-digit organic growth, and we've made very good progress on the platform and integration of newly acquired businesses. Looking into 2024, there is still a lot to be done, and we have to manage it against a difficult macro backdrop. However, we have been through these cycles before, and we have a good track record of consistent growth through them.
Therefore, we remain focused on extracting the synergies through our cross-sell opportunities. We are confident in the soft launch of our platform in Q4 this year. As Oskar mentioned, we are focused on deleveraging with further growth opportunities through cross-sell and geographic expansion and the value we are unlocking for customers through our digital platform. We are confident that we can continue delivering sustainable growth for all stakeholders. With that, I'll open the Q&A session. Thank you.
Thank you. The floor is now open for questions. Participants can submit questions in written format via the webcast page by clicking the Ask a Question button. If you are dialed into the call and would like to ask a question, please signal by pressing star one on your telephone keypad. Your first question comes from the line of Gautam Pillai from Peel Hunt. Please go ahead.
Okay. Good morning, all. Thanks for taking my questions. Martin, can you add a bit more color to the OEM partnerships? The 3 deals you have signed, are all of them similar in terms of products they have taken up or scale? And is there a scope to expand these partnerships over time? Also, when do you anticipate revenue growth to accelerate via the OEM sales channel? Is that after the platform launch? That's my first question on OEMs. Secondly, you also mentioned that the mobile app now has 32,000 monthly active users, which is quite impressive. Do you see evidence of more cross-sell amongst these customers who use the mobile app? And finally, what percentage of your customers do you expect to be on the platform launch in Q4?
I assume it might be a very small number, but have you already had conversations with some of the anchor customers who you expect to migrate to the platform in Q4? What has been the feedback so far? Thank you.
Thank you, Gautam. Good morning. Thank you for great questions. Regarding OEMs, yes, they have a similar nature in a sense that the basis of cooperation is the supply of our mobile application into their infotainment. This is the information which you were receiving earlier. However, what this cooperation allows us is to further upgrade the functionalities which will be available for the platform. So in fact, the application sitting in as a native application in infotainment will be growing together with the growth of capabilities on the platform. What the trick is for further expansion of the revenues, which we already record now because already we are booking some revenues because we are receiving compensation for the development and for placing these applications into trucks.
But what will be the trigger for further acceleration is when we converge these new happy truck owners for the subscribed customers to our platform. And this is something, Gautam, where I cannot guide you for now because, as we said, this is on one hand very exciting, but pioneering venture by definition. So we do not know yet what will be the conversion rates when a customer will be standing in the dealership site and taking a new truck back home. So this is something what we are exploring with truck manufacturers. What, however, could be expected is that different truck manufacturers will have a different pace of adopting and learning together with us how to effectively upsell or cross-sell customers in this instance. So we might be expecting unevenness. It depends on engagement, on a specific approach.
You might know that every truck manufacturer has a slightly different distribution model. Somebody has an independent dealer, somebody owns the dealership, etc. So that's why we are cautious with making big statements. However, the potential is immense. Just for a reminder, this stream, the truck manufacturers cover 45% of newly introduced trucks on the European market. And again, without the difference whether they are e-trucks, LNG trucks, or the classic internal combustion engine trucks, then it will be happening. It will be happening already from this year when certain models, new models, will be hitting the roads. And as was published earlier, we can speak only about one, which is Iveco, which is openly talking about and with excitement about our cooperation. Another two, we were not yet allowed. When it comes to the second question, mobile application and cross-sell opportunities, thank you, Gautam, for noticing it.
As I was mentioning in a previous video, this is another strong proof point of real hunger for customers for simplifications because sometimes we are getting questions, "Martin, will not be all this new environment too complex?" No, it is exactly the opposite. If you condense, if you collapse all these number of tools into one, you simplify their life. You bring the data in one place. So the customer does not need to use paper or Excel spreadsheets, or even on the way in a truck, you can imagine that this is really a nightmare. So this is just great evidence that we are going absolutely in the right direction.
When it comes to cross-selling opportunities, yes, when it comes to the smallest truck operators, meaning those who are driving and owning the truck, they do not have the need for a web-based application, or they rather prefer to do all the transactions, if possible, through a mobile application. Yes. So this segment, definitely here we see that our mobile application will accelerate cross-sell as well in these companies where the owner is running the truck and eventually having maybe one or two run by his brother or sister or whatever. So that's a correct observation. Again, to be seen with the launch of the platform where all products will be available, and we will see what will be the adoption rate. But again, for a reminder, the theme of the platform and bringing everything together from the Eurowag perspective is to accelerate cross-sell. So this is the highlight.
This is the leitmotif of the platform sales. From the customer perspective, as I said, it's a simplification of their operations and efficiency improvements gained through the availability of the data being in one place and streamlined workflows. The last question, how many customers will be at the soft launch? Yeah, yeah, yeah. Gautam, we do not speak about single customers. Definitely not. This would not be a representative sample. We speak about a quite sizable number of customers who were either using single products. I will put it differently. We were looking at the customers, the groups where we see the biggest potential for cross-sell and which are long with Eurowag, which are loyal to Eurowag, in order to get early-on feedback and make sure that through the transition of the first batches of the customers, we will be facing the least possible attrition.
So I cannot give you the exact number, but this will be a sizable portfolio enough to make sure that for the soft launch, we are confident with the quality. We are confident with the perception in order to avoid any negative surprises at the soft launch.
Great. Thank you so much for that detailed answer. Thank you.
Thank you, Gautam.
Your next question comes from the line of Rory McKenzie from UBS. Please go ahead.
Good morning. It's Rory here. Three questions, please. Firstly, on the market headwinds you described, it looks like average revenue per payment solutions truck was down maybe 2% year-over-year in H2. Can you say how much was the headwind from the lower miles driven by your customers? And then so far in 2024, what trends are you seeing? Would you expect payment solutions organic growth to improve from the Q4 level at all? Then secondly, on the other operating income this year of EUR 8 million, should we treat that as non-recurring? I guess without that, then adjusted EBITDA margins would have been more like 40%. So what are the other main moving parts this year to get you back to 43%?
Finally, on business development, can you talk more about how the digital platform launch and the other investments you've made could change your customer reach and where it might open up more potential for share gains? Which markets is this going to enable you to get into faster? Thank you.
Thank you, Rory. I will ask Oskar for the first two questions, and I will cover the business-related or business development-related one. Thank you.
Hi, Rory. On the market headwinds, yeah, clearly, it's different by region in which we operate. As you know, we cover most of Europe. The headwinds that we typically have seen, the usual things: inflation, interest rates, etc. But it's the demand that has driven the lower demand for freight, and as a result, less kilometers driven. That ranges. In some countries, it was down 12%. In others, it was down a lot less. What we expect is the markets have not improved significantly, but we expect to offset that by what we continually do and what we've continually done in the last three years in terms of continuing to get more active customers, more active trucks. Hence, as we progress with this platform, and Martin mentioned it earlier, it will accelerate the cross-sellability of our business.
That is key to offsetting some of the reduced kilometers driven. It is various, and it is not uniform across the business. In terms of the payment organic growth, you're right. In terms, it was down a little bit. We talked about a 9% growth rate, and that's a direct consequence of what we've just talked about. We do expect to maintain that growth and possibly accelerate it. We had a few issues last year, if you recall. At the beginning in H1, we had some challenges in Portugal. As a result, we continue to expect to grow. In line with the medium-term guidance and short-term guidance that we've put in this release, we expect to still deliver mid-teens growth. That, hopefully, in terms of the balance of our portfolio, we continue to cross-sell.
Not only we've got our new portfolio from Inelo customers, and clearly, some of the cross-sell opportunities fall into payments and vice versa, where some of our payment solution customers will get some ability. But we are very much focused on the integrated platform, and that is a completely different offering to our customer, very unique. It's about bundling of products and services. And hence, as we progress through the next 18-24 months, our revenue mix will be starting to change. As Martin has alluded to, it becomes very difficult to actually forecast precisely which bit is mobility and which bit is payments because we are reselling bundles and almost in access to a platform. If I may, Martin, before you get into the platform discussion, maybe I touch on Rory's question on operating income, the EUR 8 million, which is a very good question. So yes, you're right.
The margins would have been a lot less. But if you actually looked, most of that EUR 8 million was in H1. It was EUR 6 million and a EUR 2 million split in the years. And if you strip it out, you actually see the margins improving almost 400 basis points into H2. So the underlying business was already recovering that, Rory, and that's what flows into 2024 for us. So if you strip them out from each half, you'll see there is a significant organic improvement already in H2. Martin, will you answer the platform question?
Yep. When it comes to business development opportunities, we made a very conscious decision to not further expand beyond Germany, which was the last market which we've opened, because we were expecting the platform, which is not only designed to be the key theme for the cross-sell, but it's supporting digital and indirect channel, which is, in essence, very similar to digital channel, only through specific means of new trucks. And therefore, we said to ourselves, it's better to wait for the platform because this allows us to penetrate new markets, new geographies with much less efforts, much less costs compared to traditional market opening where we at first had to invest heavily into direct salesforce, where you have immediately a high cost base, and then you are catching up with the revenues. That was the model which we used so far.
So digital and indirect channel is opening new horizons in this sense. And therefore, yes, you are right. You can expect that platform is not only tackling the number of products sold per customer, but it will accelerate as well the ability to acquire customers in new geographies, but as well to do it cheaper and more effectively in existing domains because we shall not forget that still there is a huge avenue for growth with existing markets where Eurowag is already operating.
That's very helpful. Thank you both.
Thank you, Rory.
Before we continue on to the next question, a reminder, if you are listening via the webcast, please submit your questions by writing and clicking the Ask a Question button. If you are listening by phone, please press star one. Your next question comes from the line of Marco Nicolai from Jefferies. Your line is open.
Thank you, Martin and Oskar. Just two questions for me. One, regarding the active customers and active trucks in Q4, did you see any stabilisation of these KPIs? And could you also help us understand the dynamics for 2024? What growth do you target for both? And then the second one on JITPAY, on the cancellation of options, could you explain to us who will be your supply financing partner, or do you plan to do it in-house or, again, with some partner? Thanks.
Oskar, if you can cover the first question, I will cover the JITPAY. Thank you.
Yeah, Marco, both good questions. So on the active customers, that is clearly the fundamental part of the foundation of our business. We continually need to grow that because that is the basis of our revenue. In terms of stabilisation, yes, as you've seen also from the revenue split, it's typically H2-weighted. We have seen an improvement in H2, certainly in getting our volumes up, in getting our customers up. So that is an important aspect for us. And as we go into 2024, as the note the RNS actually says, it's the note of caution, but also optimism that we will be able to continue to do that. And how do we do that? It's that continuous assessment of customer by customer. As you know, we have a dynamic pricing mechanism, customer unique.
And because we have the data, we're starting to use some of that data to assess what pricing we can have by customer, what bundles as we move into the product, then what we accelerate. So we're trying to get, as Martin was earlier alluding to, the three services per customer, moving that up, as we said at the Capital Markets Day , hopefully to six in the near term. That's crucial, but it needs the active customers and active trucks to be the foundation. And that's what we focus heavily on. Martin, do you want to answer the JITPAY?
Yes. So regarding the JITPAY, just for a reminder, JITPAY is a 13th acquisition in the last few years. It was the first one when we had to do operations like a write-off of the value. The others were very successful and largely delivering what was expected. So just to put it into context, secondly, JITPAY was an early-stage organization, so it was not comparable to well-established businesses which we were acquiring before. The reason for acquiring that is because factoring and invoice discounting is really a very important functionality and feature of our platform, which we do expect because still we see the gap in financing of our customers. We decided for the M&A because at the time, we didn't have sufficient know-how first.
Secondly, there are no other more mature companies on the market because this is really a very fresh type subset of the, let's say, financing industry or the factoring industry where you've seen in the past only general factoring companies, which were not able to propose and to create solutions which would be tailor-made for trucking businesses. So in this space, there were very few businesses. That's why we decided to acquire them. We invested only and acquired only 10% of the business. And as you were informed through our RNS, JITPAY didn't meet certain financial targets which we deemed as important and which were agreed. And as we've seen lately, their problems were mounting, which has resulted in the fact that JITPAY was restructuring their group. Having said that, we do continue to be very much keen on this feature to be implemented into our platform.
So there are multiple ways how to deliver that. It will not be the way which we expected when we acquired JITPAY, but we still continue in dialogue, various stakeholders around JITPAY, whether in a new situation, we still see the way how to build what we want. Of course, the second alternative is to look at other businesses which were created in the meantime and to pursue a similar way like this JITPAY. Or the third, which is as well legitimate and which we are looking at actively, is that now, while being much more mature in terms of our own technology capabilities, in terms of understanding of the business, in terms of advancement, and as well our own e-money license, whether the best way forward will be in-house development.
So I cannot comment which will be selected, but we are looking at all those now and remain committed to connect this feature or implement this feature on our platform at the best reasonable cost and the most favorable time horizon.
Perfect. Thank you. Very helpful.
Thank you.
Thank you. There are no further questions on the conference line. I will now hand over to management to address written questions submitted via the webcast page.
Great. Thank you very much. We've got two questions online. The first one is around the reasons behind the write-downs for the investment in Inelo and JITPAY, given the initial investments were less than 12 months ago. Is there any read-across to the cooperations? And the second one is, how do you see credit losses developing in 2024?
I'll take those. So yes, let's start with the Inelo. And as I've put in the very boring accounting slide on the impairment, basic accounting, you acquire a business, you've got to do a fair value of the assets acquired, and you compare that to the consideration you paid. The difference is goodwill. Inside that set of assets that you've fair-valued are also intangible assets, such as the IT systems, their book of customers, etc. Those are intangible assets. With the acquisition of Inelo, we had large quantities of both. We had over EUR 300 million of intangibles put onto the balance sheet. And we had initially, as we put in the slide, almost EUR 172 million of goodwill on initial consideration. So two things happened as a result of that.
Typical accounting, in terms of the intangibles, we amortize that asset over a fairly short period of time, and that's a charge to the income statement over the useful life of that intangible. In terms of the goodwill impairment, what we're required to do is every year assess the value of that goodwill on the balance sheet by doing an impairment test. We typically do that by looking at the cash flows over the next five years and the turnover value, the growth rates, etc. You do a typical DCF model. What we have done this year is we've assessed, based on where we are today rather than where we were 18 months ago when we started looking into Inelo, what are the cash flows that we expect to have?
As the majority of these revenues and cash flows are from Poland, where we have seen, right back to the earlier question in terms of the headroom that Rory raised earlier, the area that we have seen a lot of stress in terms of less kilometers driven is Poland. And so we've lowered the revenue expectations for Poland. We've also took longer to integrate the business than we had typically expected. So that only happened in the back end of 2023. And as a result, some of the synergies were not delivered as we had originally assumed. We also had to take into consideration their IT systems, which were not to the standard that we would expect at Eurowag, for example, protecting us against a cyber attack, etc. So we had to upgrade some of those systems, which created an additional cost rather than a revenue synergy.
So when we took all of that into consideration, what that meant was the value of the discounted cash flows going forward versus the book value of the goodwill was the difference, and we wrote off the difference. It's a non-cash adjustment, and we've taken that hit. You can say it's early. Yes, we now own it exactly a year, halfway through March. We have got the privilege of having a lot of more benefits from that acquisition that are perhaps just financial. Our CPO is now from Inelo. Many management roles have moved over from Inelo into group roles. And we're certainly gaining from the benefits of the business being almost entirely a subscription-based model, and we're using that very much in terms of building our platform capabilities. So that's what we've had to do.
We've done it for what we have to do it for all our goodwill, not just Inelo. So that's what we took the action we took in 2023 for Inelo. In terms of JITPAY, I think Martin has just explained it. We had an investment of EUR 14 million. We deemed it to be of no value at this stage. We also didn't we had an option that we did not trigger because we felt that was not appropriate either. And therefore, we wrote that down to nil. Onto the last question of credit losses. Yes, it went up. It is a sign of our customers having to deal with the macro headwinds we talked earlier. The inflation, the interest rates, the less kilometers, lower demand, all of that has had an impact on our customers.
With them operating at very low margins, we mentioned this at the Capital Markets Day , 3%-5% margins are typical for our customers. Sometimes small items can trigger bankruptcies. That's something we're very, very mindful. We continue to have our own credit rating system that is very, very rigorous, and we try to manage this very carefully. Hence, some of the comments we've put into the RNS, such as the receivable balance at the end of the year, it's against gross receivables as a reminder, and that's gone up from 0.1% of gross revenues to 0.3%. Looking into 2024, of course, there's always the chance of further credit losses as the macro conditions continue. We don't know when that's going to turn around. As you've seen from all the announcements recently from the national banks, there's talk of interest rates coming down.
Inflation is falling in most of the territories we operate in, albeit we know we're still fairly high. So there are signs of positivity as well in the marketplaces. But the fact is, we use the data that we have from our platform to assess each customer. And often, it's us who save them by being able to prolong their credit facilities, being able to work with them as they navigate through a tough economic environment. And bizarrely, by giving them longer credits, we can actually save the customer from overall bankruptcies. And of course, throughout the process, we benefit from the revenues that we charge as a result.
Great. Thank you. I'm just conscious of time. I will get back to those who've put some questions online after this call. But Martin, if I can maybe hand back to you just to close off.
Yep. So thank you for your questions. What I would say is that the key messages which you shall take away, if you look back since IPO, and I know that we are all frustrated, who knows Eurowag for three decades and more recently the last few years from the share price. But if you look, this is one message. But if you look on our promises, what we said to the market at IPO in terms of financials, in terms of changing the business from fuel card sales focus into tech-enabled, data-centric business, everything we are delivering year by year. We are delivering. And we, again, confirm our guidance when it comes to near-term, which is mid-teens, and in mid-term to high-teens. So this is the first key message to be taken. We went through a heavy investment period, again, very much planned.
We were very clear at IPO what we are doing, that we are regearing the business, which required huge investments into in-house development, into M&A, into upskilling the teams. That's what we did. And this period is now coming to the end. So we had our last record here. And now we are only facing the deferred payments for these few acquisitions which we did in the past. So everything is executed as planned. And when it comes to the platform, which is the kind of peak or where we start to harvest all these bits and pieces, all the pieces of the jigsaw, we are well on track with the soft launch in Q4. As I was assuring you, we will have a quite notable number of customers already operating before the launch. And we see more and more evidence of customers waiting and hunger for the platform.
So we are very confident that the platform will have effects as we are expecting, although we would be only able to quantify how much it will affect our numbers and eventually further influence our guidance only in 2025. So we are stepping into 2024 with confidence. While, as Oskar said, there is as well macro, which is showing signs of, on one hand, optimisms, but as well signs where we need still to be cautious. Overall, I think 2023 was a positive year with a lot of great foundations built. And we are looking ahead to 2024. Thank you for your support and being with us. Thank you.