The Azkoyen Group, a Spanish multinational with headquarters in Navarre, earned a net profit of €6.3 million during the first half of 2018, representing a 13.7% increase in profits over the first half of the previous fiscal year.
The net turnover for the group had increased slightly compared to the same period of the previous fiscal year by 0.8%, amounting to €68.5 million, where it continued its upward trend. Regarding the above, it is worth highlighting an increase in Time & Security (+ 2.1%) and Payment Technologies (+ 0.2%) and, on the contrary, a decrease in Vending Systems (-0.3%). It must be noted that, during the first half of 2018, 18.1% of the Group’s turnover was generated in Spain, while 75.9% was generated in other countries of the European Union and the remaining 6% was derived from countries outside the European Union. These figures reflect the international business nature of the Azkoyen Group.
The group has continued with a high conversion of EBITDA to cash
After considering an outstanding dividend payment of €3.8 million as financial debt, the Group’s generation of net financial surplus over the last twelve months has amounted to €9.2 million. Thus, Azkoyen has gone from registering a net financial debt of €5.6 million of at the end of the first half of 2017, to €3.7 million of net financial surplus the 30th June 2018, which makes it possible to be available to address inorganic growth plans.
The net benefit rose by more than 13.7% during the first half of the year, amounting to €6.3 million. The company’s EBITDA/sales percentage has been of 15.3%, which represents a slight negative variation of three tenths compared to the same period in 2017. Moreover, Azkoyen recorded an EBIT of €8.4 million, an increase of 1.4% compared to the same period of the previous year.
Distribution of dividend
On June 26 2018, the Ordinary General Shareholders Meeting of the Azkoyen Group approved the inclusion of a dividend amounting to €3.8 million, 15.2% more than last year. The net amount of the foregoing dividend was disbursed on 13 July 2018.
Sales evolution by divisions
Time & Security (Technology and Security systems, Primion Subgroup)
In the Time & Security division, the commercial strategy aimed at higher profitability projects progresses successfully. Moreover, the transformation of the German subsidiary Primion Technology AG (head of the Primion Subgroup) into a GmbH was carried out, coinciding with the arrival of a new General Director for this segment.
The Time & Security division recorded the highest growth of all Azkoyen’s business units, with an increase of 2.1% in sales compared to the same period of the previous year, amounting €25.3 million, highlighting the good behaviour of France and Germany. Furthermore, an increase in customer order entry of 7.8% has been registered, amounting to €55.9 million. Thereafter, at the end of the first quarter of 2018, the order portfolio, including projects and maintenance contracts, amounted to €35.3 million, 18.3% higher than in the same quarter of the previous fiscal year.
The momentum of new developments and solutions that is being made from this division stands out. Thus, it is worth highlighting the development and commercialization strategy of a common platform for the time and presence terminals, as well as the technological renewal of other terminals with commercial demand such as DT1000. Regarding the software, efforts are being made for the renewal of the graphic user interface or “GUI”. Also, there have been workings to improve “prime Visit” and, in addition, a new “prime Mobile” application for time management and assistance in the workplace from anywhere, has been presented.
Payment Technologies (Electronic, industrial and vending machine payment methods)
This division has slightly increased its sales during the first half of the year, in particular, 0.2% more than the same period in 2017.
In Industrial Payment Methods (including gaming, service automation and retail), sales have increased by 5.9%, with a new remarkable growth rate in the retail segment of 57.9% and, on the contrary, a fast decrease in the means of payment aggregate sales for gaming and services automation of 18.1%.
For the retail segment, following significant R&D developments in past fiscal years, 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. Thus, at the beginning of the year the Cashlogy “POS1500x” was presented in Paris at “Europain 2018”, this model incorporates the new folding banknote module, in addition to the connectivity to all the most frequent operating systems and, like the rest of the Cashlogy “POS1500” series, is one of the most reliable devices on the market, with better features and a controlled price. That is why it continues its progressive collaboration in all types of establishments.
In the means of payment for vending machines area, marketed under the Coges brand, sales have decreased by 6.3% compared to the same period of 2017. When, on the contrary, they increased by 13.7% compared to the same period of 2016, partly due to positive effects derived from the entry into force of a new tax regulation on telematic data transmission and control of vending machines in Italy. It should be taken into consideration that Italy accounts for 68% of sales of Coges products, the leading European brand in closed-loop cashless systems.
It should be noted that in the first half of 2018, R&D projects related to the development of Machine to Machine (M2M) platforms and Internet of Things (IoT) applications have been launched, which will add value to the hardware developed by Coges. In this regard, it must be highlighted that at the Venditalia fair, Milan, 6-9 June 2018, Nebular was presented, an innovative connectivity solution that takes the cashless intelligence to the cloud and that will begin to be commercialized in the second half of the year.
Vending Systems (Vending machines and Cigarette machines)
The volume of sales revenue of the Vending Systems division has registered a decrease in sales of 0.3% in the first half of the year, when compared with the same period of the previous year.
The business of vending machines includes, fundamentally, professional coffee machines for the vending industry and the Horeca sector and, to a lesser extent, the vending machines for cold drinks, snacks and other. In this area, it should be noted that the coffee sector maintains its growth trend.
During the first half of 2018, there was a 1.4% decrease in sales compared to the figures for the same period of the previous year. This decrease is explained, in part, by the differences in the currency exchange rate. Thus, the British pound suffered a devaluation of 2.2% in the half-yearly exchange rate compared to the same period of the previous fiscal year.
Particularly, Coffetek, Azkoyen’s brand in the British market, has obtained slightly lower sales in British pounds than the previous year by 0.4% in the first half of 2018. In addition, more than 87% of the total sales were in pounds sterling for the UK domestic market and the rest are from other markets.
It should be noted that last January NIVO (National Operating Vending Operators) awarded Coffetek as the best Vending provider in 2017. Moreover, the Azkoyen Group participated for the first time in the European Coffee Expo Fair in London last May.
Regarding Cigarette machines, which approximately represents 25% of the revenue of the Vending Systems division, has seen its sales increase by 4% compared to the first half of the previous year, with a moderate growth in orders. Something that breaks with a negative trend started in the fourth quarter of 2016.
Azkoyen Group continues to invest and devote significant resources to innovation, with which it seeks, firstly, to reinforce the differential values of its design, as well as to improve the user experience and apply new connectivity technologies. Secondly, to achieve excellence in coffee solutions and, finally, to ensure the growth in traditional markets, development of new niche products for large accounts and to deepen their expansion in the American continent.
Key prospects
Azkoyen Group remains committed to boosting sales and innovation, maintaining, in turn, the efficiency of its operations and controlling expenses. With regard to innovation, during the first semester of 2018, fixed costs, while not including the work undertaken by Azkoyen in the area of fixed assets, and research and development activities still represent 7.5% of the net amount of the consolidated turnover (7.5% in the first half of 2017).
For the whole 2018 fiscal year and in accordance with the current plans, a moderate increase in sales revenue and an EBITDA slightly higher than at the end of 2017 are expected, with certain increases in fixed expenses. Mainly commercial and R&D expenses.