Azkoyen Group earnt 2.4 million euros in the first quarter of 2017, 39.4% more than the previous year

Spanish multinational Azkoyen Group, with HQ in Navarre obtained a net profit of 2.4 million euros in the first 3 months of 2017, in other words a profit increase of 39.4% over the first quarter of 2016.

The Group net business figure has increased 3.5% to 33.2 million euros, thus continuing the upward trend which began in 2013. It is worth mentioning part of this growth is due to the good behaviour this first quarter of the E-payment Means, Technology & Safety Systems division, which increased their sales by 18.4% and 10.3% respectively. Likewise Azkoyen Group’s clear international vocation becomes evident yet again with the results of the first 3 months of 2017, since 18.2% of the company business figure was achieved in Spain while 75.3% was in the rest of the EU and the remaining 6.5% from other countries.

Financial debt continues to reduce

By the end of March 2017, Azkoyen net financial debt had been reduced 9.7 million euros against that of the end of March last year (with a 6.7 million euro reduction in the last 9 months of 2016 and 3 million in the first 3 months of 2017). Thus, the group with HQ in Navarre has managed to reduce their net financial debt by 80.5% in the last 12 months to 2.3 million euros.

With the financial debt reduction, financial expenses dropped 44.7% during the quarter, from 351,000 euros in March 2016 to 194,000 euros at the end of the first quarter of 2017.

EBITDA recovered almost 18% in the first quarter of the year, to 4.9 million euros. The company sales/EBIDTDA percentage was 14.8% representing a positive variation of almost 2 points against the 13% reached at first quarter close in 2016. For their part, Azkoyen registered an EBIT of 3.8 million euros after an increase of 28.7%. The company has also achieved an improvement in the gross margin percentage (40.5% to 43.5%), due chiefly to a mix of businesses and products.

Sales evolution per business line

The division of E-payment Means registered the greatest growth of all Azkoyen business units, with a sales increase of 18.4%, to 10.3 million euros. The Technologies & Systems business obtained the largest sales figure in all the business areas with invoicing of 12.8 million, an increase of 10.3% against the previous period. However, a drop was seen in the Vending Machine business, which has gone from being the business with the largest growth at 31^st March, to go down one year later. Azkoyen Group sales in this area dropped 14.1% to 10.1 million euros. This reduction is largely due to the Sterling pound devaluation, which fell over 10% against the euro, since the success of Brexit in the referendum on 24rd June last year. Added to this is the bad behaviour the cigarette vending machines have experienced since the end of 2016.

Vending and cigarette vending machines

The income turnover for sales from vending and cigarette vending machines has dropped 14.1% in the first quarter of the year, on comparison to the same period the previous year.

The Cigarette vending machines division has seen its sales drop 38.9% in the first quarter, with a generalised drop in order volumes on the different geographic markets where Azkoyen operates. This downward trend in their sales began in the 4^th quarter of 2016, despite the end of the year period has historically always been the best sales period. Despite this, Azkoyen is still European leader and a reference for the large tobacco multinationals in the cigarette vending machine market niche, and currently with several projects in progress.

The Vending machines business essentially includes professional coffee machines for the Vending industry and Horeca sector; and to a lesser extent the cold drinks and snacks vending machines. In this area, Azkoyen Group is chiefly emphasising the coffee part, a sector undergoing expansion.

7% of vending income in the first 3 months of 2017 corresponds to the contract signed at the end of 2015 with Correos for the: supply, installation, maintenance and monitorization of automated home packaging terminals called “Homepaq”.

Coffetek, Azkoyen brand on the UK market obtained slightly higher sales in the first quarter of 2017 than last year’s (+1.5%) in Sterling pounds, with a fall of 9.1% in euros on conversion at the average exchange rate. The negative exchange rate on results is more limited since most of the expenditure is in Sterling pounds.

Azkoyen Group continues investing and dedicating important resources to renovating their vending product range to improve customer experience and gain in usability, connectivity and design. Furthermore, Azkoyen is working on developing new applications in catering and retail to continue growing on traditional markets. The Navarre company continues to go for technologies enabling top quality coffee to be expended. To this end, last March at the “Vending Paris 2017” fair, they presented the new Vitro S5 model aimed at the Horeca market. Plus said launching coincides with the commercialisation start-up of 2^nd generation automatic coffee machines in the Vitro series, which incorporate a more attractive design and novel technological functions.

For the second year running, Azkoyen took part in NAMA the most important US vending industry event and the Office Coffee Service internationally. Azkoyen’s presence at the fair is part of their expansion plan in the US as a strategic market. The group presented at NAMA their entire range of coffee and other hot drink machine range it offers to the American continent such as the models: Zensia, Zintro, Zen and Vitale, plus the new model Vitro S5. Likewise in February 2017, the company incorporated Azkoyen USA INC, participated 100% by Azkoyen S.A with head office in North Carolina. This new Azkoyen company will sell their professional coffee and vending machines in the US.

Industrial and vending payment technologies

This business unit has had the largest sales growth in the first quarter of the year, i.e. 18.4% more than in the same period of 2016.

In Industrial payment technologies (includes: gaming, retail and service automation), invoicing increased 7.7% with a slight deceleration in sales for belonging to gaming and service automation payment means. However, the retail segment has experienced a strong increase in relation to the great effort made in R+D to improve the automatic payment system “Cashlogy”. Thus, at the beginning of March in “Euroshop Retail Trade Fair”, Azkoyen presented their new improved “Cashlogy” product called “Cashlogy POS1500“, which increases its connectivity including to new OS like Android, iOS, Linux and Windows, besides improving accessibility with the incorporation of a new folding note module. “Cashlogy POS1500” is being sold intensely in Spain and to a lesser extent in France and Italy. 27.4% of the income from industrial E-payment means is related to payment means for retail or Cashlogy, where sales have picked up 48.4% in relation to last year’s first quarter.

In the Payment technologies for vending area, invoicing has increased 30.8%, with a considerable increase in sales in Italy. In the first 3 months of 2017, approx. 70% of payment technologies sales for vending by the Italian subsidiary Coges (European leader in closed environment cashless systems), were on the Italian market. In March 2015, Coges Mobile Solutions, participated 51% by Coges was started up. This new company created “Pay4Vend”, an App to pay vending machine sales, just using a Smartphone. It is very popular among users in Italy, while at the same time its use is expanding to other markets like the UK, France and Spain.

Technology & Safety Systems. Subgroup

In the Technology & Safety Systems business line, the consolidation perimeter has varied during the first quarter of 2017 in relation to the same period the previous year, due to the 100% purchase of the German company Opertis GmbH on 7th October 2016. This company develops, produces and sells mechatronic closure systems. However, in this Technology & Safety Systems division, Azkoyen continues successfully with their sales strategy aimed at projects with greater profitability, with an increase in the gross margin on sales. In this context, sales have experienced an increase of 10.3% regarding the same period the previous year (+5.8% organic growth and 4.5% of sales by Opertis GmbH, a percentage translating into sales of 514,000 euros). By regions, the other sales increased 8.8% in Germany via Primion Technology AG, 3.4% increase in Benelux; and 8.2% in Spain. However, there was a fall of 9.8% in France. Also worthy of mentioned is the order portfolio amounting to 29.2 million euros at 31^st March 2017, and 7.1% more than at close of the first quarter of 2016.

At close of the first quarter of 2017, Azkoyen Group participation in Primion Technology AG was 95.73%. However, surpassing 95% participation enabled start-up in October 2016 of a process to exercise the right of compulsory acquisition of the remaining percentage, in exchange for fair compensation in cash. Thus, during the first week of April, the shares belonging to the minority stakeholders (4.27%) were transferred to Azkoyen Group. Since then, Azkoyen has become sole shareholder of the company specialised in integral access and presence control and safety systems. Thus, the Navarre Group can delve further into their control and generation of synergies.

Main perspectives

Azkoyen Group continues with its commitment to boosting sales and innovation, while at the same time upholding the efficacy of their operations and expenditure control. Regarding innovation, in the first quarter of 2017, fixed expenses, fewer works done by Azkoyen for fixed assets, due to R+D activities, represent 7.6% of the consolidated business net business figure (7.5% in the first quarter of 2016).