Azkoyen Group, a Spanish multinational based in Navarra, has shown a net profit of 9.1 million euros during the first nine months of 2018, which represents a 11.7% profit increase compared to the same period of the previous fiscal year.
The business’ net profit of the Group has increased by 2.5% compared to the same period of the previous fiscal year, totalling 100.3 million euros, which allowed it to continue with the steady rising. Regarding the foregoing, it is worth mentioning the increase in Time & Security (+ 4.4%) and Vending Systems (+3.6%) and, on the contrary, the slight decrease in Payment Technologies (-0.9%). It must be noted that 17.9% of the Group’s volume of business was produced in Spain, while 76.3% was generated in the rest of the European Union; the remaining 5.8% corresponds to other countries. These figures reveal the international nature of Azkoyen Group.
The Gr0up maintains a continuous high conversion of EBITDA in cash
After the dividend payment of 3.8 million euros on July 13, the generation of net financial surplus of the Group during the last twelve months has amounted to 6.9 million euros. Thus, Azkoyen has gone from recording 2.5 million euros of net financial debt at the close of the first nine months of 2017, to 4.4 million euros of net financial surplus on September 30, 2018, allowing to address inorganic growth plans.
The net profit has risen by 11.7% during the first nine months of the year, totalling 9.1 million euros. The EBITDA/sales percentage of the company has been 15.3%, representing a slight negative change of four tenths compared to the same period in 2017, which totalled 15.7%. EBITDA, excluding the capitalization of development projects, increases by 1.9% compared to the same period of the previous fiscal year.
Moreover, Azkoyen has recorded an EBIT of 12.2 million euros, after an increase of 2.5% compared to the same period of the previous fiscal year.
Evolution of sales by divisions
Time & Security (Technology and Security systems, Primion subgroup)
In this division of Time & Security, the business strategy targeted to higher profitability projects, focused more on own solutions and with a greater product integration, together with efficiency improvements in management continues to be successful.
In the fiscal year 2017, Azkoyen S.A. became the only shareholder of Primion Technology, AG. Recently, on July 17, 2018, the transformation of the German subsidiary company has been effective (head of the Primion subgroup) in a GmbH, coinciding with the arrival of a new CEO for this segment.
The Time & Security division has recorded the highest growth of all the business units of Azkoyen Group, with a 4.4% rise in sales compared to the same period of the previous fiscal year, up to 38.4 million euros. It is worth mentioning the good performance of Germany, Belgium, and France, on the one hand, and the decrease in the performance of Spain, on the other. Additionally, the maintenance income accounts for approximately 28% of the volume of business.
Moreover, on September 30, 2018, the orderbook, including maintenance contracts and projects, amounted to 35.4 million euros, which is 2.5% higher compared to the same period of the previous fiscal year.
It is important to highlight the boost of new developments and solutions that are taking place in this division. Thus, it is worth mentioning the development and marketing strategy of a common platform for time and presence terminals, with the new ADT11xx and 1200 ranges, as well as the technological renovation of other terminals with market demand, such as DT1000. Regarding software, efforts are undertaken for the renovation of the graphical user interface or “GUI”, to meet the needs of the current users through an intuitive, clear and concise structure. This new graphical interface, as well as the new and interesting functions of the rest of the Time & Security hardware and software, Primion subgroup, have been presented at the Security Essen fair, Essen—held from September 25 to September28, 2018—the most important event for security systems, cybersecurity, and fire protection in Europe.
Payment Technologies (Means of electronic, industrial and vending payment)
This division has experienced a slight decrease in sales during the first nine months of the year, specifically 0.9%, compared to the same period of the fiscal year 2017.
With regards to Means of industrial payment (including gaming, service automation, and retail), sales have risen by 1.7%, with a new growth rate of 52.8%, quite remarkable in the retail segment and, on the contrary, a decrease of 22.7% for the aggregate sales of means of payment for gaming and service automation.
In the retail segment, following significant R&D efforts during the previous fiscal years, the Group’s resources are focused on its automatic payment system “Cashlogy”, which reduces collection times by half, enhancing the transactions’ security by detecting fraud and avoiding cash discrepancies and petty thefts. It is worth highlighting the presentation of the“POS1500X” model, the most advanced one of all the Cashlogy series at the IBA Fair—held in Germany, from September 15 to September 20, 2018. At the beginning of the year, this model was also presented in Europain, Paris. Cashlogy “POS1500X” has the new folding note recycling module embedded and connects to all the most common operating systems and, as the other models of the series, is one of the most reliable devices in the market, providing the best services and at a reasonable price; that is why it continues its progressive installation in all kind of establishments.
In the area of Means of payment in vending machines, marketed under the Coges brand, the sales have been reduced by 4.1% compared to the same period of 2017; opposite to the 9.8% increase during the same period of 2016 (in part due to the positive effects arising from the entry into force of a new fiscal regulation in Italy on the telematic transmission of data and the control of vending machines). It should be considered that Italy accounts for 68% of the sales of Coges products, European leading brand in cashless systems for closed environments.
It should be noted that during the first nine months of 2018, R&D projects related to the development of Machine to Machine (M2M) platforms and apps of Internet of Things (Iot) have been started, which will bring added value to the hardware developed by Coges. Accordingly, it should be underlined that at the Venditalia fair, Milan—held from June 6 to June 9, 2018— Nebular was presented, an innovative connection solution which takes the cashless intelligence to the cloud and will soon begin to be marketed.
The sales volume revenues of the division of Vending Systems has experienced a 3.6% increase in sales during the first nine months of the year, compared to the same period of last year.
The vending machines business includes, fundamentally, professional coffee machines for the vending industry and the Horeca sector and, to a lesser extent, vending machines for cold drinks, snacks and others. In this area, it should be noted that the coffee sector maintains its steady growth. During the first nine months of the fiscal year 2018, there was a 2.7% increase in sales, compared to the figures for the same period of the previous fiscal year.
During the first nine months of the fiscal year 2017, Coffetek—the Azkoyen brand in the British market—reported sales revenues in British pounds 4.4% higher than the ones of the previous year. Besides, more than 88% of the total sales have been produced in pounds in the UK domestic market, and the rest are addressed to other markets.
It is worth mentioning that, through its brand Coffetek, Azkoyen Group has received the “Best machine innovation” award in the “Vending Industry Awards”, granted by the British vending industry, for Novara Protein, an ideal model for gyms and sports centres. Said award adds to other two received in September from the British consortium AVS, for the Vitro series, as “Best manufacturer” and “Best table top vending machine.”
Sales of Tobacco vending machines, which account for a percentage lower than 25% of the revenues of Vending Systems, have registered an increase of 7.2% compared to the first nine months of the previous year, with a moderate growth in orders in certain geographic markets.
On the one hand, Azkoyen Group continues investing and dedicating important resources to innovation, with which it initially intends to reinforce the differential values of design, as well as improving the user experience and applying new connectivity technologies. On the other, it intends to achieve excellence in coffee solutions, and also to ensure its growth in traditional markets, the development of new niche products for large accounts and, finally, to deepen its expansion in the American continent.
Azkoyen Group remains committed to boosting sales and innovation, maintaining the efficiency of its operations, and the control of its expenses. Regarding innovation, during the first nine months of the fiscal year 2018, fixed costs—except for the works performed by the Group for mobiliary, research—and development activities still represent 7.6% of the net amount of the consolidated turnover (7.5% during the first nine months of the fiscal year 2017).
After the first nine months of the fiscal year 2018, in accordance with current plans, a moderate increase of the sale revenues is expected to take place in the fiscal year 2018. Also, an EBITDA similar to the one obtained at the end of 2017 is expected to be obtained now, with certain increases in fixed costs, mainly business and R&D increases.