Azkoyen Group achieved a net profit of €8.1 million during the first nine months of 2017, 20% more than during the same period in 2016
- Financial debt was reduced by more than 72%, standing at €2.5 million.
- EBITDA grew by nearly 6.7%, amounting to €15.4 million.
- The Electronic payment technologies business continues to lead the growth trend with a 12.9% increase in sales.
The Azkoyen Group, a Spanish multinational with headquarters in Navarre, earned a net profit of €8.1 million during the first nine months of 2017, representing a 20% increase in profits as compared to the same period the year before.
The Group's net business figure fell slightly, by 0.3% compared to the previous year, coming in at around €98 million. Worth mentioning is the satisfactory performance of the Electronic payment technologies division, with an increase of 12.9%, in contrast to the Vending machine division, which suffered a downturn of 13.6%, among other reasons, due to a significant reduction in the cigarette vending machine business, which has been accounted for in the company's business plans. With regard to the Technology and security systems division, its sales have increased by 3.1% and its order book has reached €34.6 million, 17.9% more than on the same date the year before. It must be noted that, during the first nine months of 2017, 17.3% of the Group's turnover was generated in Spain, while 76.9% was generated in other countries of the European Union and the remaining 5.8% came from countries outside the European Union. These figures reflect the international nature of the Azkoyen Group.
Financial debt continues to decrease.
After paying a dividend of €3.3 million and the allocation of another €2.9 million for payments of minority shareholding acquisitions of the Primion Subgroup (€0.1 million for the third quarter of 2016 and €2.8 million for the first nine months of 2017), the Group's net financial debt decreased by €6.7 million, as compared to the close of the first nine months of the previous financial year (€3.9 million less for the last quarter of 2016 and €2.8 million for the first nine months of 2017, respectively).This represents a 72.5% reduction in net financial debt, which has been made possible by the EBITDA generated. Furthermore, after the minority acquisitions, the Azkoyen Group has become the sole shareholder of the Primion Subgroup.
In June 2017, the Azkoyen Group fully, and without penalty, repaid the remaining amount of €13.6 million ahead of time on a syndicated loan approved in December 2008 with various credit institutions for an initial amount of €55 million, which was later increased to the amount of €65 million. After this repayment, the secured guarantees and other limitations and obligations established under the syndicated loan have been removed.
The EBITDA has grown by €1 million, representing 6.7% more than during the same period last year, increasing from €14.4 to €15.4 million. The EBITDA percentage / Group sales has recorded figures of 15.7%, one point better than the 14.7% recorded during the same period of 2016.Azkoyen's EBIT, in turn, has grown by €1.3 million, after experiencing a 12.6% increase over the same period the year before, from €10.6 to €11.9 million, with a reduction of €0.4 million in amortizations.
Distribution of dividends
On 23 June 2017, the Ordinary General Meeting of Shareholders of the Azkoyen Group approved the proposed distribution of results of the 2016 fiscal year, including a final dividend of €3.3 million, which corresponds to a gross amount of around €0.136 per share in circulation at that time. The net amount of the foregoing dividend was disbursed on 14 July 2017.
Evolution of sales by division
Out of all the divisions of Azkoyen, it is the Electronic payment technologies division that has recorded the most growth, specifically, a 12.9% increase, to €30.1 million. The Security technologies and systems division has achieved the highest volume of sales for all business areas, with a turnover of €36.7 million, up by 3.1% on the same period in 2016.By contrast, the Vending machine division's sales experienced a year-on-year drop of 13.6%.
Cigarette vending machines and vending
The income stream related to cigarette vending machines and vending experienced a 13.6% decrease over the same period as the previous year.
The Cigarette vending machine line saw its sales register a noticeable decrease of 36.4% over the first nine months of the previous year. The drop has been general in terms of order volumes in the different geographical markets in which Azkoyen operates, a downturn that was evident as early as in the fourth quarter (which historically has had the greatest volume) of 2016 and that was basically accounted for in the established business plans.
In spite of this decrease, in this market niche, Azkoyen continues to be the leading company in the European market and the reference for large multinational tobacco companies, with different projects currently under way.
The Vending Machine business line for the most part includes professional coffee vending machines and, to a lesser extent, vending machines for cold drinks and snacks. In this sector, the Azkoyen Group is allocating a significant portion of its plans to the coffee business, an industry that is experiencing a growth phase.
Over the last three years, the average annual growth in sales increased to 19.6%, due to, among other reasons, the success of the new products, as well as the broadening of the customer base in various geographic markets.
During the first nine months of 2017, there was a 5% decrease in sales as compared to the figures for the same period of the previous year. This reduction is explained by the 6.4% increase in the main vending machine activity, notably, the performance in Germany, the United Kingdom and France; the 4.1% decrease resulting from the exchange rate, in which there has been a significant devaluation in the pound sterling following the "Brexit" vote in June 2016, and finally, a 7.3% drop resulting from the lower supply of automated home package delivery terminals in Spain.
Coffetek, the Azkoyen brand used in the UK market, has achieved slightly higher sales during the first nine months of 2017 as compared to the previous year, specifically 3.1% higher in pounds sterling, representing a decrease of 5.2% in euros after conversion at the average exchange rate. In spite of this effect of the exchange rate in sales, the fact that most of the expenses are expressed in pounds sterling allows for a lesser impact on the results. More than 90% of the total sales were in pounds sterling for the UK domestic market and the rest are from other markets.
The Azkoyen Group continues to dedicate significant resources to renewing its range of vending products, so as to improve the customer experience and to rank highly in usability, connectivity and design. Likewise, Azkoyen continues to be committed to technologies that enable it to achieve excellence in coffee solutions, the growth of traditional markets, the development of certain niche products for large accounts, and new applications for catering and retail, as well as expansion in the Americas.
Azkoyen participated in the AVEX trade fair held 12-13 September in Birmingham (United Kingdom), where it presented several different models, highlighting the Vitro S5 model, which has a large supply of coffee beans, intended for the Horeca sector.
Coffetek (its brand in the United Kingdom), was recognised for the fifth consecutive year at the "Vending Industry Awards" sponsored by the British vending industry, having received the awards for "Best Innovation in Machines" for the Vitro M3, and "Best Online Initiative of the Year" for its web service for customers.
On the other hand, the Group is currently presenting two new "free-standing" machine models, the Novara Double Cup and Zensia Double Espresso, which make it possible to incorporate different qualities of coffee and dispense beverages in two types of cups. It is an excellent opportunity to improve coffee service margins and customer satisfaction.
With regard to the American continent, it should be mentioned that during the first nine months of 2017, the subsidiary company Azkoyen USA, INC. was founded, which will enable the group to develop the automatic professional coffee dispensing and vending machine commercial activity in the United States.
Electronic, industrial and vending machine payment methods
This is the division that has increased its sales the most during the first nine months of the year, specifically, 12.9% over the same period the previous year.
In Industrial means of payment (which includes gaming, service automation and retail), turnover has increased by 15.4%, having experienced a significant growth in the retail segment and a slight increase in aggregate means of payment sales for gaming and service automation. For the retail segment, following significant R&D developments, the Group's resources have been focused on its automatic payment system called "Cashlogy", which reduces collection times by half, enhances the security of Transactions by detecting fraud and avoiding cash discrepancies and petty thefts. In this sense, we can highlight the new improved series of the "Cashlogy" product, called "Cashlogy POS1500," which was presented in March 2017.
32.3% of the income from industrial payment systems is related to payment systems for retail or "Cashlogy". Its sales have increased by 57.9% as compared to the same period the year before.
In the area of Means of payment for vending machines, (Coges), turnover has increased by 9.8%, with considerably better sales in Italy. During the first nine months of the year, around 70% of the product sales in this business unit have been in the Italian market.
According to independent external sources, companies dedicated to operating vending machines will have to invest intensively in progressively more "cashless" payment methods, with new technological solutions that complement the functionalities offered to vending machine customers and operators.
Technology and security systems. Primion Subgroup.
In the Technology and security systems division, the perimeter of consolidation has varied as compared to the same period the year before as the result of the acquisition on 7 October 2016 of 100% of the German company Opertis GmbH, which is dedicated to the development, production and marketing of mechatronic closing systems.
In addition, this division of technology and security systems continues to be successful in their commercial strategy, which has been focused in recent years on projects with greater profitability and has been more dedicated to in-house solutions. Sales have experienced a 3.1% year-on-year increase (including a 0.5% organic decrease and 3.6% growth from sales via Opertis GmbH).After an 11% increase in new customer orders, at 30 September 2017, the order book, including maintenance contracts and projects, stood at €34.6 million, this being 17.9% higher than during the same period in 2016.The new German subsidiary has contributed €1.3 million in sales. With regard to the others, sales have grown in Germany (5.9%) due to Primion Technology, AG, and in France (1.6%), while having fallen in Benelux (-11.8%) and in Spain (-7.6%).
In addition, after the significant increases recorded in recent years, the gross percentage margin has grown slightly as compared to the same period the year before. The Azkoyen Group continues to promote the development of both its own products and solutions. Among others, the Primion Subgroup presented its new family of time and detection terminals, "ADT 11xx", at the Essen security trade fair in September 2016. These machines come with touchscreens, a modular system, an attractive design, heavy-duty construction and a common platform. In addition, a new modular visitor management system was presented in Spain last August through Primion Digitek, S.L.U. Called "prime Visit", this technology limits or provides access to certain areas of a company by employees and visitors, enabling visits to be managed quickly, professionally and efficiently.
The Azkoyen Group continues to be committed to promoting the growth of sales and innovation, maintaining the efficiency of its operations and controlling costs. With regard to innovation, during the first nine months of the year, fixed costs, while not including the work undertaken by Azkoyen in the area of fixed assets and research and development activities, represented 7.5% of the net amount of the consolidated turnover (as compared to 7.2% in the first nine months of 2016).
For the whole of 2017, following an excellent 2016, Azkoyen expects a slight increase in sales revenues and a moderately higher EBITDA than in 2016, with certain increases to overheads, mostly in marketing and R&D. Furthermore, the investments of the different businesses in intangible assets (development projects in the Primion Subgroup and computer applications) and materials have been leveraged.