The Azkoyen Group increases its net profits by 54.3% in 2016, to €11 million.
- Its EBITDA grows by nearly 22%, amounting to €20.6 million.
- The net financial debt drops by 65.4%, to €5.3 million
- The Electronic payment methods business leads the growth trend with a 16% increase in sales.
- The Board proposes that the Shareholders' Meeting dedicate 30% of the consolidated results to dividends, for a total of €3.3 million.
The Azkoyen Group, a Spanish multinational with headquarters in Navarre, earned a net profit of €11.1 million in 2016, which represents a 54.3% increase in profits over the previous year.
The Group's net turnover rose by 6%, to €134.5 million, continuing the upward trend began in 2013. The average annual growth over the last three years amounts to 5.2%. Part of this increase is due to the good performance of the Electronic payment methods business line, the sales of which grew by 16% in 2016. By region, the sales recorded for the past year once again show the clear international vocation of the Azkoyen Group. Accordingly, 17.9% of the turnover was from Spain, while 76.3% came from the rest of the European Union and the remaining 5.8% was produced in other countries.
Azkoyen's net financial debt was reduced by €10 million, which translates into a reduction of 65.4%. As of 31 December 2016, it amounted to €5.3 million. This reduction was made possible by the EBITDA that was generated. At the close of 2016, the net financial debt / EBITDA ratio was 0.26 (down from 0.91 at the close of 2015). With the reduction in financial debt, the net financial expenses decreased from €1.9 million in 2015 to €1 million in 2016, which represents a decrease of 44.5%.
The EBITDA rebounded by 21.9% in 2016 over the previous year, to €20.6 million. The EBITDA / company sales percentage was 15.3%, which represents a 2-point positive change over the 13.3% reached the previous year. The company, in turn, registered a 25.7% increase in EBIT, to a figure of €15.4 million. Azkoyen has also experienced an improvement in the gross margin percentages (from 41.1% to 42.1%), due primarily to reasons related to the product and business mix.
Shareholder payments continue
Azkoyen's Board of Directors has agreed to propose to the General Shareholders' Meeting that an amount equivalent to 30% of the consolidated results after taxes be allocated to dividends. This will mean a disbursement of €3.3 million, charged to the 2016 accounts.
Evolution of sales by business line
The Electronic payment method division registered the greatest growth of all Azkoyen's business units, with a 16% increase in turnover, to €36.3 million. The Vending machine division continued the upward trend and signed off on €47.4 million in sales, which meant an increase of 6.2%. The Technology and security systems unit, in turn, earned the largest amount of sales, with figures of €50.7 million, even though this represents a 0.2% drop in sales.
Cigarette vending machines and vending
The income volume related to cigarette vending machines and vending experienced an increase of 6.2% over the same period the year before.
In the Cigarette vending machine and vending business unit, sales were 7.4% lower than the year before. This decrease in turnover occurred as the result of the strong drop experienced during the last quarter of the year by the unit, which showed atypical behaviour in 2016 and recorded a reduced volume of orders. Over the course of the year, the important decrease in activity in Spain, and to a lesser extent in Germany, was partially made up for by the good condition of the Italian market. All things considered, the Azkoyen Group continues to be the European market leader and reference for the large tobacco companies worldwide.
The Vending machine division consolidated its growth in previous years by recording a 12.6% increase in sales as compared to figures the year before. It essentially includes (i) professional automatic coffee machines and vending machines, and to a lesser extent (ii) other cold beverage and snack vending machines. A significant part of the plans are focusing on the coffee portion of the business. It should also be pointed out that 10.8% of the vending income accrued in 2016 is related to a contract signed with the Spanish Postal Service (‘Correos') at the end of 2015 for the supply, installation, maintenance and monitoring of automated home package delivery terminals called "Homepaq".
Coffetek, Azkoyen's brand in the British market, has been awarded the prize for the best innovation of 2016 by the vending industry in recognition of its Button Barista app, the first mobile app for vending machines that allows consumers to personalise beverages to their own liking. Similarly, in May 2016, the new "Vitro Espresso Fresh-Milk" model was presented. This machine uses fresh milk to prepare coffee-to-go beverages, following market trends. The "Vitro Max" was also introduced, with a larger capacity. These machines complete the successful "Vitro" line of OCS / dispensing machines that has been so successful in Europe, particularly in the United Kingdom. Later in the year, the new Vitro S5 model was presented, intended for the Horeca sector.
On the American continent, Azkoyen Andina, a subsidiary company owned 100% by Azkoyen, with headquarters in Colombia, received the "Invest in Pereira" award for the positive work it has done in the region. Furthermore, continuing with its expansion plan, in April 2016 the Group participated for the first time in the NAMA trade fair in Chicago, with the aim of introducing their coffee vending machines in the United States.
Electronic, industrial and vending machine payment methods
In this business unit, sales have increased by 16% as compared to the year before.
In Industrial payment methods (including gaming, service automation and retail), turnover has increased by 27.2%, with a 16.6% rebound in aggregate payment method sales for gaming and service automation, primarily in Italy, Germany and Spain. In the retail segment, R&D efforts have been focused on their "Cashlogy POS1000" automatic payment system, an evolution of the earlier models that makes it possible to cut the payment time by half and reinforces the security of the transactions. 24.5% of the industrial payment method revenue is related to retail payment methods or Cashlogy, where sales have grown by 76.7% in 2016 as compared to the previous year.
In the area of Vending machine payment methods, sales have increased by 5.5% and better performance was recorded in Italy. Around 65% of the payment methods sales for vending by our Italian subsidiary Coges, the European leader in closed-environment cashless systems, were made in the Italian market. In March 2015, Coges Mobile Solutions was created, 51% of which is owned by Coges. The new company developed "Pay4Vend", an application used to pay at vending machines through the customer's smartphone. Its innovative features earned "Pay4Vend" the French ProdiaPlus prize in February 2016.
Technology and security systems. Primion Subgroup.
In Technology and security systems, a commercial strategy focusing on more profitable projects was continued, reaching a gross sales margin of 45.7% in 2016 (as compared to 43.9% in 2015 and 41.3% in 2014). In this context, sales declined by 0.2% with regard to the previous year. On 31 December 2016, the orderbook showed €29.1 million, 8.2% more than at the close of the previous year. By company, sales increased in Germany by 0.2%, in the Benelux by 1.8% and in Spain by 1.9%; on the other hand, they decreased in France by -13.9%.
Most of the activity in Germany was carried out through Primion Technology AG, the German subsidiary of the Azkoyen Group, specialised in comprehensive solutions for security, access control and presence detection. In early October 2016, Primion Technology, AG acquired 100% of the German company Opertis GmbH. Its activity, which includes the development, production and marketing of mechatronic closing systems, has been integrated within the Technology and security systems division of the Azkoyen Group. The integration of the Primion and Opertis solutions will result in an improved and expanded service portfolio and range of products, and will also reduce our dependence on external subcontractors. On 31 December 2016, Azkoyen's share of Primion Technology, AG was 95.73%, following the purchase of an additional 3.08% during the period. According to legal regulations in Germany, by exceeding a 95% share, we have the right to exercise a compulsory acquisition of the remaining percentage ("squeeze-out"), in exchange for a fair cash compensation as determined based on specific reports. In this context, the Extraordinary Shareholders' Meeting held by Primion Technology, AG on February 17, 2017 gave the green light for the transfer of the remaining 4.27% of shares, which will permit greater control and generation of synergies.
The Azkoyen Group continues to be committed to promoting the growth of sales and innovation, maintaining the efficiency of its operations and controlling costs. In terms of innovation, during 2016 fixed costs, minus work done by the Group in the area of fixed assets, and research and development activities represented 7.4% of the net amount of the consolidated turnover (as compared to 7.0% in 2015).
For 2017, the Navarrese company expects a moderate increase in revenues from sales and an EBITDA (in absolute figures) slightly above those for 2016, with certain increases in fixed expenses, mainly commercial costs and those related to R&D. Investments in intangible assets (development projects in the Primion Subgroup and computer applications) and materials, in turn, will be leveraged in the different business units.