Good day, ladies and gentlemen, and welcome to the W.A.G payment solutions plc H1 2026 results. The presentation will commence shortly. After the presentation, we will conduct a question-and-answer session. If you wish to ask a question, you will be able to ask a question either through the Zoom webinar link provided separately or by submitting written questions using the Ask a Question button on the SparkLive webcast page. During the question-and-answer element of this morning's call, if you wish to ask a question, we ask that you please use the raise hand function at the bottom of your Zoom screen. If you already have a question, please do this now, ready for when the question-and-answer begins. Please note that this call is being recorded. I would now like to hand over to Martin Vohánka, Chief Executive Officer, to open the presentation.
Good morning, everyone, and thank you for joining us today for Eurowag's interim results. We delivered a strong and resilient performance in the first half of 2026 with continued customer growth, double-digit net revenue growth, robust margin, and lower leverage while making significant progress on our key strategic priority for the year, the integration and migration of Eurowag Office. The majority of our services are now available through the platform. Over 65% of our customers are actively using Eurowag Office today. Many of you will probably recognize this slide from our previous results, but we wanted to bring it back as it provides a very good illustration of resilience of our business. Over the past 18 years, Eurowag has consistently grown through very different fuel price and macroeconomic environments. The first half of 2026 provides further evidence of that resilience.
Despite significant fuel price volatility and while executing an important phase of integration and migration, we continue to grow and deliver strong results. This behavior is also evident in the industry we serve, where the outlook is becoming increasingly supportive. European road freight has remained resilient and growth is expected to accelerate over the coming years and remain ahead of the broader European economy. We are also seeing encouraging indicators in the market today. New truck registration across our market increased by 10% year on year, providing a positive signal of continued fleet investment and underlying activity. Importantly, Central and Eastern Europe are playing an increasing role within European road freight. Nearshoring, greater supply chain localization, and continued investment in regional manufacturing capacity are strengthening the region's role in intra-European trade.
We are seeing interesting structural trends that are particularly relevant to the markets in which we have strong presence. With that, let me take you through the progress we have made on our key priority for 2026, product integration and customer migration into Eurowag Office. I am very pleased with the progress we have made year to date. As you may remember from our last call, one of our milestones for the first half was the integration of Toll into Eurowag Office, and we have now achieved that. With Toll now integrated, the majority of our services are available through Eurowag Office, as you can see on the left-hand side of the slide. We will continue enhancing the functionality already available, adding further capabilities, and advancing our product development, as well as completing the integration of our transport management solution, which is planned for 2027.
From a customer perspective, the progress has been very strong. We have achieved another important milestone with over 65% of our customers now actively using Eurowag Office, up significantly from 35% at the end of Q1 when we last spoke. During the remainder of the year, our focus will remain on continuing the migration of the next customer cohorts while further enhancing the platform. Customer behavior in Eurowag Office has been also encouraging. As more customers actively use Eurowag Office, we are seeing not only broader adoption of the platform, but also deeper engagement. The graphs on the left shows the significant increase in monthly and weekly activity throughout the year. On the right-hand side, we are showing a specific example on how customers who still use one of our legacy systems are increasingly shifting their activity towards Eurowag Office. Let me explain this in more detail.
Our customers migration strategy is centered on a merge and migration approach. This is an approach used by many successful tech companies, and it allows customers to become gradually familiar with a new, better system. When we look at merge customers who continue to use one of our legacy system alongside Eurowag Office, we see strong evidence that their engagement with Eurowag Office has been increasing steadily, overtaking legacy platform. Importantly, when these customers return to the legacy system, the main reason is purely administrative, typically to access billing documents. On the other hand, they are increasingly using Eurowag Office for broader range of operational capabilities. This shows that customers are gradually shifting their day-to-day activity from legacy environments to Eurowag Office as they become familiar with the platform. Taken together, these behaviors give us encouraging evidence that customers are increasingly adopting Eurowag Office.
The platform is becoming part of their regular operating routines, and we strongly believe this trend will continue to accelerate as we deploy more integrated workflows. With respect to NPS, we saw a decrease in the score during the first half of the year to 29.6 points due to two core factors. First, up until 2025, we measured NPS based on a multi-branded approach. Clients from acquired businesses were being surveyed about the relevant legacy brands they were very familiar with. In 2026, following the completion of our rebranding program, we changed our NPS measurement methodology and moved to a unified measurement under the Eurowag brand. As a result, many respondents from acquired businesses moved from promoters to neutral, reflecting the fact that they are not yet as familiar with Eurowag.
We anticipated some negative impact when we decided to change the methodology, but we believe it was the right commercial decision as we move towards a unified brand. Importantly, we expect this impact to be temporary, and the early data we are seeing is already reflecting this. Second, the first half of the year was a period of elevated and volatile fuel prices. Fuel represents almost half of our customer base, and in the industry operating on tight margins, it's not unusual to see customer sentiment come under pressure during the periods of elevated fuel prices. Considering these two factors, we expect NPS to improve over the coming quarters, supported by encouraging customer response we are already seeing. Before I hand over to Oskar, let me bring this together with a summary of our strategic KPIs, which complement the strong financial performance we delivered during the first half.
First, we continue to grow our customer base. Active trucks increased by 7% year-on-year to over 335,000 trucks, a higher growth compared to 5% increase during the first half of last year. This is particularly encouraging given that we are delivering stronger growth while remaining focused on customer migration and through a volatile fuel price environment. Second, even though this year we focused on migration, average number of products per truck increased to 2.7. This is encouraging because it shows that we continue to deepen customer relationships even before we move into our next phase of scaling and monetization. Third, as I have just mentioned, while NPS is lower, we expect this result to be temporary, with early data already showing this. Fourth, the recurring nature of our revenues. Subscription revenues reached EUR 41 million in the first half and now represents approximately 23% of group net revenues.
When combined with the highly recurring nature of our total revenues, almost half of the group net revenues is now recurring. Finally, I would like also to highlight the strong customer ratings across our digital applications. Eurowag Office mobile application is rated 4.7 on Android and 4.8 on iOS, while Eurowag Navigation is rated 4.4 and 4.5 respectively. With that, I will hand over to Oskar to take you through our financial performance in more detail.
Thank you, Martin, and good morning to everyone. As Martin has already mentioned, we are reporting a strong set of results for the first six months of the year. Let me start with the key financial highlights. Net revenue increased by 10.7% to EUR 179.5 million, while adjusted EBITDA increased 10.5% to EUR 70.6 million, with a robust margin of 39.3%. Adjusted cash EBITDA increased 13.2% to EUR 55.7 million, with a margin improving to 31%.
Adjusted profit before tax declined 14.7% to EUR 23.7 million, primarily reflecting an unrealized non-cash foreign exchange impact during the period, resulting in an adjusted basic EPS of EUR 0.0253 per share. We continue to invest into the business with EUR 21 million of capitalized R&D focused on our Eurowag Office platform and its technology and data capabilities. Finally, net leverage continued to improve, now standing at 1.8x from 1.9x in December 2025.
We have continued to deliver strong top-line growth, with net revenue increasing by 10.7% to EUR 179.5 million, despite high and volatile fuel prices. This is further evidence of the resilience of our business model. Importantly, growth is broad-based across the services. Energy grew by 6% and toll by 26%, supported by continued expansion of our EETS offering. Mobility grew by 11%, excluding non-core non-CRT revenues. Within mobility services, growth was led by fleet management solutions at 15% and navigation and tax refund both at 12%. I would also like to highlight again how our revenue mix has evolved over time. As you can see on the slide, our revenues have become increasingly diversified, while at the same time we have continued to increase the proportion coming from highly recurring sources. During the first half, recurring revenues grew 14% year-on-year and currently represent 47% of the group's net revenue.
These include toll, which is inherently highly recurring as customers continuously use our network for road payments, and subscription revenues, which provide predictable recurring income across a growing range of our services. In the first half, toll represented 24% of net revenue and subscription revenues 23%. We also delivered robust growth in both adjusted EBITDA and adjusted cash EBITDA during the first half. Adjusted EBITDA increased by 10.5% to EUR 70.6 million, with good margins of 39.3% broadly stable year-on-year. Adjusted cash EBITDA increased even further by 13.2% to EUR 55.7 million, with the margin improving by 60 basis points to 31%. We are seeing strong EBITDA growth alongside improving cash EBITDA while continuing to invest in our business.
Taking a closer look into the key drivers of adjusted cash EBITDA performance, credit losses remain well controlled with an increase of only EUR 0.3 million or 4%, despite high levels of insolvencies across the transport sector and higher fuel prices. Our underlying credit performance and recoveries continue to be in line with expectations, with a credit loss ratio improving to 0.3% of total revenues and toll volumes from 0.4% in H1 2025, and stable versus the year end of 2025.
Employee expenses increased EUR 5.1 million or 10%, excluding non-cash share-based payments, and was mainly driven by salary inflation and investment in the people we need for the next phase of the business. Technology and other operating expenses increased by EUR 2.3 million, of which EUR 0.3 million relates to technology and cloud transformation, and the remaining EUR 2 million to other operating expenses, including marketing, travel, and professional fees.
Finally, capitalized R&D increased EUR 3.1 million as we continued to invest in the platform and its technology and data capabilities. Net income decreased from EUR 10.5 million in H1 2025- EUR 5.2 million in H1 2026, primarily reflecting foreign exchange movements. In H1 2025, we recognized an unrealized FX gain of EUR 3.5 million compared with an EUR 8.3 million predominantly non-cash FX loss in H1 2026, largely related to the appreciation of the Hungarian forint. This movement impacted both basic and adjusted EPS, with EPS affected by a slightly higher weighted average number of shares following the exercise of employee share options during the period. Total capital expenditure increased by EUR 1.8 million- EUR 26.5 million with capitalized R&D accounting for EUR 21 million.
Of this, EUR 14.7 million was invested in the continued development of our products and services and EUR 6.3 million invested in technology and data capabilities that form the foundation of the integrated platform. We also invested EUR 4.3 million in onboard units, which support our toll and fleet management businesses and remain an important enabler of revenue growth. Importantly, OBU investment remains efficient despite continued growth in toll. We are improving the economics of our hardware through greater standardization, suppliers diversification, and the refurbishment and reuse of returned onboard units. The remaining EUR 1.2 million capital expenditure related mainly to infrastructure, including our truck parks and IT hardware. Overall, capital expenditure remained disciplined at 14.8% of net revenue. Moving on to net leverage, I am pleased to report a further improvement to 1.8x from 1.9x at the end of 2025.
We generated EUR 17 million of free cash in the first half, impacted mainly by a EUR 54.4 million working capital outflow. As we have discussed previously, higher fuel prices increase the working capital requirements of our customers. The H1 outflow also reflects timing around the period end, as collections and payments can move the balance meaningfully from one day to another. Importantly, the movement remains within our expectations and within the range of working capital swings we have previously indicated can occur and does not reflect a structural change in our working capital requirements. When we look at working capital over a longer period, trade receivables and trade payables grow broadly in line with total revenues, including toll volumes, and on a 12-month basis, working capital remained broadly neutral. Despite the working capital outflow, our strong EBITDA growth enabled us to further improve net leverage to 1.8x .
Let me now turn to capital allocation. Our priorities remain unchanged, and are focused on balancing investment in the business with maintaining a strong balance sheet while returning capital to shareholders when available. Firstly, organic growth remains our top priority. We will continue to invest in a modern, scalable, and AI-enabled platform with capitalized R&D expected to remain below EUR 50 million for the full year. Secondly, we remain committed to maintaining a strong balance sheet with net leverage between 1.5x- 2.5x , now sitting at 1.8x . Thirdly, we will continue to pursue targeted bolt-on M&A opportunities, particularly associated with complementary products and services, or bringing additional active trucks onto the platform to continue expanding our market penetration. Finally, we will continue to consider appropriate returns of capital to shareholders while preserving the financial flexibility of the business.
In July, we returned approximately EUR 12 million to shareholders through a special dividend. Finally, based on our first half performance, we are updating our adjusted cash EBITDA guidance for the year from a range of EUR 105 million- EUR 150 million to range between EUR 110 million- EUR 150 million. We are reiterating all other FY 2026 guidance. We remain confident delivering low double-digit net revenue growth and an adjusted EBITDA margin of around 40%. Capitalized R&D is expected to remain below the EUR 50 million cap, and net leverage to remain below 2x and within our target range of 1.5x- 2.5x . With that, let me hand it back to Martin, who will take you through some of the progress we have made across the business and what we see ahead.
Thanks, Oskar. Now let me briefly touch upon some of the product and services developments we have made during the first half, which further demonstrate how we continuously enhance our services. In energy, we continue to expand our fuel network with over 17,800 stations, which include 2,700 alternative fuel stations, while further developing our decarbonization as a service offering with solutions such as Biofuel Swap and automated sustainability certificates. Sustainability is embedded in our strategy to help customers reduce emissions and meet increasingly complex sustainability requirements. In toll, we expanded our EETS coverage to 14 countries now including Netherlands. We also grew our connected EVA units to around 122,000 and successfully deployed our proprietary map-matching technology. This is particularly important, because we are increasingly bringing critical technology in-house, reducing reliance on third parties while improving accuracy, scalability, and indeed economics of our solutions.
We also continue to enhance our digital fleet solutions. We strengthen communication in between dispatchers and drivers across Eurowag Office and our navigation app, improved our live map, and introduced the driver work module, helping automate reporting and reduce administrative work for customers. What ties all these developments together is combination of our technology, infrastructure, regulatory capabilities, and proprietary data. This is a key part of what differentiates Eurowag Office and strengthen our competitive position. At the same time, we continue to evolve our operating model to support the platform at greater scale while improving efficiency and maintaining high levels of service. We are investing in AI and automation, including our internally developed AI assistant for customer care, which is helping improve first contact resolution and reduce resolution times.
We are also standardizing operational processes across fleet management and our hardware supply chain, while using supplier diversification and greater hardware use to support a more efficient cost base. As the platform grows in scale and importance, we continue to strengthen cybersecurity, business continuity, and regulatory readiness. Looking ahead, our priority for the reminder of 2026 is clear. We will continue advancing our customers' migration program while enhancing Eurowag Office. With the progress we are making, we are in a strong position to move into the next phase of our strategy in 2027. Our focus will increasingly shift from integration and migration towards scaling and monetizing Eurowag Office. We see significant opportunity to deepen customer relationship, increase product penetration and cross-sell, while using our proprietary data and integrated workflows to create increasingly intelligent and personalized solution for our customers. Our commercial model will evolve alongside the platform.
The direct sell remain an important part of our model today, but we are increasingly moving towards a more consultative approach using a broader understanding of each customer's operation to identify their needs and recommend the right combination of solutions. At the same time, Eurowag Office is enabling us to scale a digital onboarding and self-service, allowing us to reach and onboard customers more efficiently. An important part of our commercial strategy is the relationships we've built with leading OEM partners, which provide us with an important enabler to accelerate new customer acquisition in an efficient and scalable way. We continue to develop these partnerships and see further potential as our integrated proposition evolves. We look forward to updating you on their progress at appropriate time.
In summary, as we look beyond 2026, we have the platform, the customer base, the data, the technology, and the commercial capabilities to capture the next phase of the opportunity. We will share much more detail on how we see that opportunity developing at our Capital Markets Day in London on the December 1st, where we will set out our strategy for scaling and monetizing Eurowag Office and our medium-term growth opportunities. I very much look forward to seeing many of you there. With this, I would like to open the session to question-and-answer. Thank you.
Ladies and gentlemen, we will now begin the question- and- answer session. 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 wish to ask a question, please use the raise hand function at the bottom of your Zoom screen. If you are dialing in via phone, you can raise your hand using star nine and unmute yourself by pressing star six. We will pause for a moment to assemble the queue. Our first question comes from Gautam Pillai with Peel Hunt. Please go ahead.
Good morning, Martin and Oskar. Thanks for taking my questions. You have highlighted previously that 2026 is an integration and migration year, and you proved that. You are probably running slightly ahead of plan as well with 65% of the customers migrated on the platform. Looking us slightly ahead, 2027 shifts towards scaling and monetizing Eurowag Office. What specifically changes in the economic model once the migration is largely complete? Should investors expect monetization to primarily come through higher product penetration, pricing power, new database services, or lower customer acquisition costs? That is my first question. Shall I go on with my questions or do you want to take one by one?
I am happy to take that one, Gautam. Thank you. Very good question. Good morning. What we expect from our platform are a number of things, and you have actually touched on all of them. We expect accelerated growth as we progress with the migration in terms of active trucks. As customers get more familiar with the services via an integrated platform, they will see the opportunity of using multiple products rather than single products or combinations of products. So what we expect is to see lower churn as customers get more locked in, start to use us as their operating model. With lower churn, you get increased growth in terms of revenue. So higher active trucks as people get more comfortable with the offering we make, lower churn, increased revenues going forward. The opportunity to cross-sell, upsell becomes immense because we have a complete offering for our customers.
At the same time, what this does for them is the ability to dramatically reduce the administration tasks that they have in their back offices. So there is the cost benefit for them as well as that, and we have indicated what that is in the past. So it is a mutual benefit for them and for us. What it does for us, though, is also as we move to more indirect sales and digital onboarding, for example, the cost of acquisition of every new customer is expected to fall. At the same time, as we mentioned at the full year results, we have over 20 projects that we are running using AI and automatization in order to make our total operating target model internally more efficient.
With that. As well as when we get to the stage of decommissioning some of the legacy systems we currently have, such as the Vision, there would be an expected saving of that as well. So the margins should also improve. In summary, higher growth rates and improved margins are the key attributes that investors can expect.
Great. Thank you. Just one more question from me, and this is on the toll business. Toll has been doing really well for the last few half years. We know that CO2-based tolling is expanding across Europe, and Eurowag is continuing to add countries. Also, onboard units and you are obviously developing an in-house technology around that with Eurowag Office. How early are we in this transition, and could regulatory complexity actually accelerate market share gains for an integrated provider like you over the medium term?
Yeah, thank you, Gautam, for the question. Yes, of course, we are very pleased with toll evolution. Just for reminder, the drivers are actually having multiple reasons behind the growth. The first is that we are adopting more countries. Not only that, there are new countries which are adopting tolls as such, like Netherlands, which had vignettes, which is time-based, where they could not really charge because there was a regulatory cap in Europe on that. Whenever they introduced performance-based toll means, driven by kilometers, they could charge much more, which is immediately boost to our revenues. The next to it is what you mentioned, yeah, so CO2 tolling, which increase the unit price or tax, if you will, because at the end, toll is a tax, specific tax. The CO2 is increasing that.
What we increasing the charge per kilometer, and therefore, again, drives our revenues. What we increasingly see, and thank you for this observation, Gautam, because this is absolutely spot on, that this number of countries, the complexity of the systems to run is immensely growing. Just for the sake of example, if one country changed the requirements for onboard unit and back-office system, it means that we need to re-certify in the rest of the countries. This means that there is a higher and higher barrier or moats towards a new entrance. We see that especially the players which were in toll area, and solely in toll and providing only toll offerings, that they are not able to sustain their market position and economics because simply they are reliant only on toll revenues. Meanwhile, Eurowag is having benefit, of course, of all the other things.
We see that simply the market of future-proof EETS providers is shrinking. Now it is only a handful. We might speculate a bit about the future, that the number will further shrink. If you look on M&A activity on the sales, on disposals of these, this just confirms that this is the unavoidable trend. Simply, we continue to be keen on tolls. We will be massively investing into that during 2027, 2028 to leverage all these opportunities which are lying there. Of course, while complementing it with the rest of our ecosystem, this is, of course, a fantastic differentiator and boost to our revenues.
Great. Thank you so much for that.
Thank you. Our next question comes from Julian Yates with Investec. Please go ahead. Julian, please go ahead with your question. Looks like we are having some audio trouble from Julian. We will go back to them. Our next question will come from Hannes Leitner with Jefferies. Please go ahead with your question.
I hope you can hear me. Thank you for letting me on. I got a couple of questions. The first one is with the EW Office transition, 65% is definitely a strong performance. You were talking that this is kind of the basic function where now users have both versions. Can you maybe talk about that? How long will users be able to use the old functionality? Then also when you think really that the product features of the new EW Office in all the different sub-products will be on par with the standalone product. That is maybe the first one. Then just looking at fuel crisis, the macro level increasing freight prices, it feels like Eurowag has gained market share. Maybe you can talk there about the dynamic, how you see what really drives the underlying market share growth. Maybe just the last thing on toll roads.
Gautam spoke very rightly so that this is a big driver for your growth lately. Maybe you can just square the pricing you have because volume growth has not kept up with your revenue performance. Is there anything which you kind of over-earn because of some changes in CO2 inclusion, et cetera? Or should we really think 500 basis points is the right way to think going forward and keep rising? Thank you.
Yeah. Thank you, Hannes. I will try to take piece by piece as you raise it. How long it will take before customers will be eventually using the old platforms or legacy platforms? It depends, of course, on their decommissioning, but this will be happening during the next 15 months, largely. For instance, I was mentioning in the presentation that they are going back for invoicing documents. This is from the reason that simply the invoicing was not yet embedded into back office of Eurowag Office. As soon as this will be finished, customer will not have a reason to go back to invoice and therefore will stay with that. So there will be still time to achieve fully that, and we expect that largely it will be happening during next year. These some functions and some cohorts reminder for 2028.
When it comes to functionalities being on par, actually, it's interesting question because what we are delivering is not like for like product base. This is the lifting which we need to do as well with our customers, because we are completely redefining the way how they are working. We are not anymore I didn't have a picture.
You've been lost signals.
Yeah, I have lost signal. Sorry.
But the microphone is here.
Okay, perfect. Sorry for that. We had a small technical problem. When it comes to being on a par, customers were used to certain ways of working, certain verticals. Nowadays, as we introduce a horizontal workflow, many of things are not needed to be done. Many of things customer can simply avoid to be concerned because simply the platform, the data, AI, and analytics on that, is solving on behalf of the customer. The short answer is we will never be on a par with old legacy systems, but it's by design, it's by purpose. Because simply, we are simplifying the jobs of customers, and Oskar was mentioning earlier, we are aiming to save customers 50% of their administrative tasks. That's what I would say on that point.
When it comes to T oll and pricing power, there are few more things which I forget to mention, and which will hopefully answer your question. For instance, if we are switching national toll to EETS, like for instance in Poland, there is a different remuneration because EETS provider is having much broader, much bigger share on value added on the number of services which are behind. Meanwhile, just pure payments and national tolls is a certain segment of all the services provided. EETS provider is providing simply much more, and therefore is more remunerated.
So it means that whenever we connect to Poland, not through national scheme, but through EETS scheme, then we are having one-off tick of higher margin, which can be quite material. Maintaining the volumes or growing the volumes in line with our overall growth, but having immediately higher unit margin. So this is another reason which is boosting our revenues.
The last one is simply pricing power, Hannes. Because having all these countries, having the Eurowag Office platform and offering this in one go, really save people money, save time, and therefore, the willingness to pay for the service is increasing, and therefore, our pricing power is increasing and it is reflected in our revenues. On market share gains, you have seen that this chart, which was depicting our historical revenue growth, Brent prices, and GDP growth, that historically our growth was market share gain. This will always remain like that. What we are doing here and why we were investing last five years in Eurowag Office is to completely redefine rule of the game, and redefine the way how customers are working, in order to increase the attractiveness of Eurowag offerings, and therefore to accelerate these market share gains. Simply, that is what we will be doing.
Great. Just a last comment on toll roads. You think that this is sustainable, the current pricing you are asking, or do you think that competition at one point will dilute that? I am just thinking about the long-term trends and opportunity on tolls. Thank you so much.
Hannes, definitely, there will be some components of this growth which will cease to exist. For instance, now there is still number of countries in Europe which do not have tolls. There is a definite number of countries in Europe. For instance, this will dry out. As well as national countries which are having tolls and switching to EETS. Still, if you see we have 14 countries, and in Europe are altogether 28 countries or 27, with a majority of them being meaningful, in terms of like a geography. Still we see for next few years this growth, but where we remain optimistic in long term is, Hannes, that we see shrinking number of EETS providers.
First, because of the growing complexity. Second, this is the basic thesis of Eurowag Office, that single product providers will go out of the market, be it toll provider, be it fleet management provider, be it tax refund provider. Because simply for customer make no economical sense to sustain single relations to various providers. Because simply integrated workflows and data in one place, enhanced by AI, is much more economically powerful. If they will not adopt it, they will be out of the business. So, the shrinking number of providers will get us into better and better position. Complemented with Eurowag Office, we believe that our pricing power will remain very high, even in long term.
Great. Thank you.
Our next question will come from Julian Yates with Investec. Please unmute yourself to ask your question.
Hi there. Can you hear me this time?
Yes.
Excellent. Right. I have got a couple of questions. The first one is just talking a bit more about the subscription pricing bands and your thoughts around that and what you are looking into that for 2027. Also how fuel will interact with that, because I assume fuel will still be based on a transactional model. So what are you proposing to customers who are doing fuel on the transactional model and who may also be subscribed for the other part? Just that dynamic and early thoughts around that would be really helpful. The second one is M&A. You put that on the pause for a year or so, understandably, with Eurowag Office focus. You mentioned about M&A now sort of coming back onto the radar with new capabilities, potentially, or new customer segments.
If you could talk a bit about that within either the tech or the financing solution space, what are your thoughts on that and timelines? Thank you.
Julian, thank you for questions. Regarding the subscription, now we are in very exciting stage, because you might remember that since IPO we were talking about subscription, but this is becoming reality. We are just now launching gradually in those weeks as we speak, the new pricing scheme for our customers. Which are the kind of like a, from outside world, visualization of the platform, and manifestation of the advancement of Eurowag Office. Simply that we are not anymore offering single products, or we will continue, but there will be new offerings which will bundle a broad number of services and will be based on a subscription model. So we will continue with the pay-as-you-go model for the reasons that some customers might be trying just one product or two products.
But we believe that there will be increasing adoption of subscription-based model, which will be three groups, from basic to premium one. As said, we will be introducing it throughout these weeks. We are very optimistic when it comes to outlook to that, because what we did in spring of this year is large quantitative and qualitative survey among customers, in order to gain confidence, in order to design the value proposition in the best possible way. We know that customers are ready for it. Customers are keen. The main reason is not necessarily own experience from the industry, because we will be very first with such a broad portfolio to put under one umbrella, one subscription. But because they are used to as well from other industries or from their own personal experience when consuming services like Netflix or whatever.
That's what is fueling our optimism. When it comes to fuel as well, Julian, tolls, and any transactional services, you are right that so far we had transactional revenues, but as we were indicating long time ago, as well those, we are translating largely into subscription model simply per truck. We believe that this is the future of the industry, and that this will, again, propel customer loyalty, and increase number of transactions for fuel compared to transactional revenues. Because simply whenever customer will pay one lump sum per month per truck, then of course, clearly he has motivation to maximize the transactions with Eurowag, be it fuel or eventually toll, but largely fuels. Because simply make no sense to use other fuel cards, where he is paying the transactional fee on top, meanwhile with Eurowag, the transactional fee will be largely removed.
That's what is all embedded in a subscription. You can think about premium subscription as like all-you-can-eat value proposition. That's what I would say on a subscription.
Understood. Thanks so much.
In terms of M&A, and I will ask Oskar to eventually complement, there is nothing new in a sense that we were traditionally looking on both angles, how to add capabilities and add volumes. We continue to do that. You might recall that we want to strengthen still the financing side of our value proposition and that's the area where we are looking at, when it comes to M&A as well. As well on the load side, sourcing of load on behalf of our customers. Again, there might be relevant ways, and targets to look at. That's what our teams are working now. At the same time, volume matters, scale matters. We see, and this links to the previous answer to previous questions, we see that more and more companies are struggling to defend their market share while having only one product.
We are scanning the market and looking on what economical options we might have in terms of acquisition, and therefore accelerate number of trucks and then, of course, in a second step to cross-sell them and achieve our objectives faster. Both of these areas are relevant. I do not know, Oskar, whether you want-
Yeah. We are looking at businesses, software businesses, where the revenue output per truck is low in order for us to upsell, cross-sell. Also what that means is multiples will be lower. But essentially for us, it is the ability to upsell, cross-sell quickly, immediately migrate their customers onto our platform would be the ideal situation rather than acquire a business and then manage it for a period of time. We continue to look at M&A. We never stop, so it is a continuous process. Our M&A department are always busy and we continue to look through the markets. What we wanted to get to in terms of status was get the platform to a state where we are able to migrate customers quickly onto the platform, and we are soon going to get to that stage. So you are right to ask that question.
Great. Thank you. Thank you very much.
Our next question comes from Bram Buring with Wood & Company. Please unmute to ask your question.
Yes, hello. You hear me?
Yes, Bram.
Excellent. Most of my questions have been answered. I have two. Employee expenses on an adjusted basis are still growing faster than the top line, and I am wondering when or if that is going to continue in the second half and in 2027, or if that is going to change. That would be the first question.
On the slide, we show that it has gone up about 10%, of which a majority of that increase is inflation. Inflation increases were about 5% and above. What we had to do, though, Bram, is also continue to invest in more people. You will see overall employees numbers have also gone up versus a year ago, and that is very important. We are now investing in different qualities and capabilities. We are far stricter in terms of where we want to look at resource requirements. As we start to use more data and AI, there is a clear change from where we were even 12 months ago. That is quite significant. As we also move into a subscription-based model, we know we need to invest more in marketing, et cetera.
But also commercially, we have to change the way we are selling, and that has also changed some of the employee structure. In terms of where we go from here, we do expect employee numbers to stabilize because we believe we've done that investment. But there are always going to be changes. But for us, at the moment, we're quite happy where we find ourselves with our resource team.
Which I assume implies that it's the size you wanted right now.
At the moment, for the size of the business we contemplate going forward for 2027, we feel we are at the right level. There clearly can be changes, but we've always had to invest ahead of the revenue growth. And we expect, as I said earlier, the key driver for the platform is accelerated growth, and hence we've had to invest in people ahead of that growth.
Clear. The second question, what was that? Yes, connected trucks. The number grew well ahead of what I was expecting. I'm wondering, let's see. So we grew connected trucks by 4% in the first half. Is this a kind of a pace that we can expect to continue or accelerate or decelerate?
Bram, actually rather accelerate. So that's why we are introducing digital channel, indirect channel. These are all initiatives which shall increase the absorption or the capability to acquire. And at the same time, by locking in customer, by providing more services, being more useful to minimize churn. So yes, definitely acceleration. Otherwise, it would be disappointing.
Okay. Bad question, but the answer is quite clear. Thank you. That's all.
Thank you. Our next question comes from Abbie Bell with UBS. Please unmute to ask your question.
Morning, both. I hope you can hear me.
Hi, Abbie. Yes, we can.
Brilliant. Most of my questions have been asked, but just one left. Looking at the NPS drop, could you unpack how much of this is methodology and the temporary fuel price volatility relation? Or if you have actually observed any underlying customer friction from the Eurowag Office migration and any initial feedback on niggly bits that you guys are seeing? Thank you.
What we did was, because we knew there was going to be a drop when we switched from multi-brand to single brand, we had to do it now rather than do it at the end of the year. Excuse me. What we did is we used a similar cohort just to have it as a baseline, and the change in methodology was about 8 points. If you look at where we ended up, just under 30, and you are adding out 8 points or 9 points, you can see that the volatility in the energy markets was the difference. We feel very comfortable where we are. You can just imagine, if you are an Inelo customer previously and you have only been using Inelo, and the survey is a single question, and you are asked to talk about the Eurowag Office brand.
As Martin said earlier, you are going from a promoter previously to neutral, and hence, that is the biggest fall. We feel comfortable that as we continue to communicate directly with customers and follow up on some of their concerns. As Martin mentioned, we are using software to actually monitor how they switch between old and new. I think that was one of the first questions we had. That gives us a segue into the customer, and we are able to answer a lot of their questions, and our team feel confident that that will improve as we migrate more customers onto the platform.
That is super clear. Thank you so much.
There are no further questions on the Zoom webinar. We will now address the questions submitted via the webcast page. I will now hand over to Carolina Orozco, Vice President of Investor Relations and Communications, to read out the written questions.
Thank you. The first question is from Martin Novák. Congratulations on the positive results. Can you please comment on the development of the acquisition costs and ARPU per truck?
Hi, Martin. Good question. These are the exact KPIs that we will be demonstrating at the Capital Markets Day. Excuse me. We are not reporting them now. We have said all along that at Capital Markets Day, we will be showing the typical platform software type of KPIs such as these. ARPU, you can calculate the overall number, but that has no value. We will be looking at more cohort information. And through that, of course, cost of acquisition, logged lifetime value become essential KPIs, which we are working towards. What we said in the previous Capital Markets Day, now three years ago, was that roughly the cost of acquisition was around EUR 500 at the time. And we expect through the digital and indirect channels, as well as the platform uptake, that should improve by about 40%, was what we indicated three years ago.
It gives you at least a flavor of where we're going in terms of cost of acquisition. In terms of ARPU, those are the KPIs we will be reporting on December 1.
Thank you, Oskar. We have one final question from Hannah Crow. Net leverage improved to 1.8x , but net debt in absolute terms rose by EUR 30 million, and you paid a EUR 12.1 million special dividend after the period. How should we think about capital allocation priorities? Further special returns versus debt paydown, versus M&A for H2 and into fiscal year 2027?
That's a good question, Hannah. On slide 19, we did show what our capital allocation is at the moment, and we've also indicated that we will be giving a formal policy on capital allocation also at the Capital Markets Day in December, because we understand many investors and analysts are concerned about this area. Of course, number one, it's organic growth. We need to continue investing in our current business, growing the organic business, making it scalable, AI-enabled, as we've always said. So number one, organic growth, absolutely. Two, our strong balance sheet. I want to have a strong balance sheet now, particularly as we look into the future in 2027, 2028, 2029, in terms of these M&A opportunities Martin mentioned. So I need to have a strong balance sheet as we go into that period, and hence, I'm always looking at the net leverage element.
I accept your question in terms of the net debt has increased, but that was of no surprise to us in the period, as working capital outflow was EUR 54 million. So this was expected. Yes, the dividend came in subsequently, but we have given the guidance that for the full year, it will remain below 2x . If you look at the debt profile at the appendix of the presentation, you can see the expected reduction in our loan structure. The third focus is on M&A before anything else, and Martin's now talked about the opportunities that we face. So adding complementary product services, active trucks, in order to have the ability to cross-sell, upsell on our platform. But there are, of course, also transformational opportunities out there. Finally, we look at returning excess capital if we're able to preserve flexibility for the business.
That's what we've done currently. This is the second special dividend we have, and we accept that that has been a concern for many people. We'll come up with a formal policy at end of the year.
Thank you, Oskar. We just received another question from Martin Nicholas. Please relate to negative working capital in first half 2026. Is it driven primarily by elevated oil prices or also by worsened customers' payments discipline? Potentially, what is the approximate impact of it?
Thank you, Martin, for the question, and a good one. Simply, when the fuel price went up by about 20% from April to June, automatically, even if your volumes are flat, your receivable, your cost for the customer goes up by 20%, as does the receivable. We recognized that was going to be a major concern for our customers. Because they get paid 60 to 90 days after delivery, they were expected to absorb that cost whilst only going to be paid for that significantly later. There was an immediate request, not only did we see receivables go up, but of course, correspondingly, the payables go up as we have to pay for that fuel.
However, there was an increase in request for extended terms, and we did that on a customer-by-customer basis so that it wasn't poor payment, it was deliberate increase in payment terms so that they could get through the difficult period. This is what we've done throughout the 30 years that we've been operating, and that first slide that Martin showed where we see the resilience of the business, that is why we continue to gain customers through difficult times. They have nowhere else to turn to when it comes to this working capital crisis or challenge in their position. We do this deliberately and the results are there to be seen in terms of revenue growth and active trusts. Not sure I answered everything.
Yes.
Okay. Any other questions?
There are no further written questions. I will now hand back to Martin Vohánka for closing remarks.
Yeah, so thank you for all your questions. Thank you for joining this session. As you heard, we are in truly exciting times, with Eurowag Office up and running and encouraging customer migrations, right behavior, what we expected, now launching new value proposition and preparing for Capital Markets Day where we will be introducing new set of KPIs and speaking a lot about future, what we expect in terms of acceleration. So I am very much looking forward to see many of you there. Thank you very much. Bye-bye.
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