The Azkoyen Group, a Spanish multinational based in Navarra, obtained a net profit of €16.1 million at the end of the financial year 2019, which translates into a 3.2 % increase over the previous year.
The net turnover of the Azkoyen Group also increased with respect to 2018 by 4.7% (percentage similar to constant exchange rates), reaching €145.8 million. This growth is thanks to the good performance of the Time & Security division, which achieved a 7.3% increase in sales, as well as the Payment Technologies division, which reported a 5.6% increase.
When analysing the consolidated turnover by region, in 2019, 18.3% of the turnover comes from Spain, with 75.8% coming from the rest of the European Union (including 10.1% from the United Kingdom) and the remaining 6% coming from other countries in which the Azkoyen Group has a commercial presence. This geographical distribution reiterates the international character of the Azkoyen Group. Conversely, the gross margin in percentage on the turnover increased from 43.4% in the financial year 2018 to 44.2% in the current financial year, with a different mix of businesses and products.
On the other hand, it is worth highlighting the EBITDA growth of 15.9%, reaching €25.7 million at the end of the financial year 2019. Similarly, the Group’s EBITDA/sales percentage stood at 17.6%.
In turn, EBIT increased to €19.4 million 7.7% more than the €18.0 million reached at the end of 2018.
The Group adopted IFRS 16 retroactively, acknowledging the cumulative effect of the initial application of the standard on 1 January 2019 (in the consolidated balance sheet, lease liabilities for approximately €6.1 million and assets for usage rights for the same amount), without restructuring the comparative information.
For comparative purposes, prior to the first application of IFRS 16, EBITDA amounted to €23.3 million, 5.3% more than in the same period of the previous year, after the growth of the gross margin by 6.6% and partially offset by certain increases in fixed and other expenses.
As a consequence of the new standard, in the financial year 2019, EBITDA increased by €2.4 million (payments for operating leases were previously included in EBITDA, but the amortisation of assets for usage rights and financial expenses in lease liabilities are excluded). As of the end of the financial year 2019, the consolidated balance sheet included assets for usage rights and lease liabilities for an amount of approximately €7 million.
The net effect of the application of IFRS 16 on EBIT and the consolidated net profit is virtually nil (with lower lease expenses and, on the contrary, an increase in amortisation).
Fixed expenses amounted to €44.9 million 5.1% higher than in the same period of the previous year, after certain increases in commercial fixed costs, R&D and others, in accordance with the defined organic growth plans in force.
Result before tax for 2019, the third best since 1988
After the previous aspects, the consolidated result before taxes for the financial year 2019 amounted to €19.2 million. As seen in the following graph, showing the evolution of the Azkoyen Group’s result before tax since 1988, adjusting all historical values to euro as of December 2019, the result before tax obtained in the financial year 2019 is the third best since 1988, the year in which the company went public, and behind the result achieved in 2001, when the company had a large one-off derived from massive sales of currency selectors for the introduction of the euro.
Proposal for distribution of dividends
The Board of Directors of the Azkoyen Group will submit to the General Shareholders’ Meeting for their approval the allocation of dividends at an amount equivalent to 30% of the consolidated result for the financial year 2019, that is, approximately €4.8 million.
Net financial debt
After allocating €29.7 million to dividend payments in 2019 and accounting for lease liabilities according to IFRS 16, the net financial debt at the end of the financial year 2019 amounted to €10.5 million, thanks to the high EBITDA conversion in cash obtained (73% of EBITDA conversion ratio, excluding IFRS 16 effects, in cash). Conversely, net financial expenses are higher than those reported in 2018, from €172,000 to €200,000 – a 16.3% increase.
Evolution of the sales by divisions
The Time & Security division (technology and security systems) reported the highest growth of all Azkoyen divisions, with a 7.3% increase in sales, reaching €57.7 million compared to €53.8 million from the previous year. It was followed by the Payment Technologies division (electronic payment methods), which achieved €43.4 million and a 5.6% increase. In turn, the Coffee & Vending Systems division (vending machines) reported an increase of 0.7% compared to 2018, with a turnover of €44.8 million.
For the entire financial year 2020, the growth in sales revenue is expected to exceed 4.7% in 2019, as well as slightly higher EBITDA in absolute terms compared to 2019, with new increases in fixed expenses, mainly commercial and R&D, in accordance with the strategic plan approved in February 2019.
Similarly, investments of the different businesses in intangible assets (development projects in the Primion Subgroup and computer applications) and materials are being promoted, with an aggregate budget for the financial year 2020 of €6.7 million, 49.3% higher than the figure of €4.5 million for the financial year 2019.
The benefits of the strategic plan will be progressive, with the aim to achieve the highest sales and results growth in the financial year 2021.