GRAND DUCHY OF LUXEMBOURG – The Board of Directors of IVS Group S.A. (Milan: IVS.MI), convened on May 15th, 2018, and chaired by Paolo Covre, reviewed and approved the Interim Consolidated Report at 31 March 2018, showing the constant growth of the group’s results.
Quarterly Highlights:
- Total vends: 213.4 million, +4.3% vs 1Q 2017
- Consolidated Revenues: Euro 107.3 million, +6.1%, compared to 31 March 2017.
- Adjusted EBITDA 2: Euro 24.4 million, +3.1% compared to 31 March 2017, with an EBITDA margin on sales of 22.7%. EBITDA Adjusted per working days, +4.2%.
- Group Net Profit: Euro 6.1 million (after profits attributable to minorities of Euro 0.3 million), + 17.7%.
- Adjusted Net Profit Euro 6.8 million (after minorities), +13.0%.
- Net Financial Position: Euro -262.5 million, from Euro -254.1 at 31 December 2017, after payments in the first three months of Euro 24.4 million related to investments in fixed assets and acquisitions.
- Completed in the first quarter 2 acquisitions in Italy for an enterprise value of Euro 7.9 million.
Operating performance
Consolidated revenues In the first three months of 2018 amounted to Euro 107.3 million (of which 98.9 related to the core vending business), with an increase of 6.1% compared to 31 March 2017 (of which Euro 93.7 million in vending).
Revenues in the vending business increased by 5.9% in Italy, by 16.9% in Spain, 7.8% in Switzerland and decrease by 2.7% in France. Coin Service division sales increased by 14.4% mainly due to the start-up of new businesses in the subsidiary Venpay S.p.A..
The increase in vending revenues in 1Q 2018 was influenced by a lower number of working days, (almost -1 days on average, compared to 1Q2017), with around the same number of working days in Italy, -1,5 days in France, -4 days Spain, -4 days in Switzerland, mostly due to the Eastern holidays that in these countries occurred during the first quarter. Net of calendar effects, quarterly results would be higher. Sales like for like and at par working days increased by 2.4% overall; with +2.6% in Italy, +5.5% in Spain, -2.1% in France and -17% in Switzerland (due to the loss of a significant client of the Swiss branch).
It has also to be considered that some days of closed businesses due to exceptional snowfalls in February 2018, caused the loss of a certain quantity of sales (almost 1 million vends lost) in some major cities in Italy and France (i.e. Rome, Naples and Paris).
The total number of vends in the first quarter was equal to around 213.4 million, +4.3% from 204.7 million of 1Q 2017.
Average price per vend increase was equal to Euro 46.4 cents, from 45.8 cents of 1Q 2017 (+1.3%).
During the first three months of 2018 were completed 2 acquisitions in Italy, with an Enterprise Value of around Euro 7.9 million, contributing Euro 0.9 million to sales on pro-rata basis from the date of the acquisition.
Adjusted EBITDA increased by 3.1% compared to the first three months of 2017, from Euro 23.6 million to Euro 24.4 million, with an EBITDA margin on sales in the first quarter was equal to 22.7%. The increase of Adjusted EBITDA at par working days was +4.2%.
The first quarter 2018 results were also affected by special situations and specific costs (classified above the Adjusted EBITDA) that if normalized and included in possible adjustments, would add approximately Euro 1.0 million to Adjusted EBITDA, with an margin exceeding 23.5%.
Group Net Profit in the first three months is equal to Euro 6.1 million, (+17.7% from Euro 5.2 million at March 2017), after profits attributable to minorities of Euro 0.3 million. Net profit includes some extraordinary costs linked with acquisitions and other non recurring operations.
Net Profit Adjusted for the extraordinary items is equal to Euro 6.8 million (after minorities), +13.0% compared to Euro 6.0 million of the first quarter 2017. The reduction of taxes is also due to higher tax deductible depreciation on new capex approved in the last year by the Italian government (Industry 4.0 decree).
Net Financial Position, equal to Euro -262.5 million, from Euro -254.1 million as of 31 December 2017, after payments for investments in the first quarter of Euro 24.4 million, of which around Euro 14.4 million for investment in fixed assets and Euro 10.0 million for acquisitions, including payments related to investments made in former periods. Also were paid monthly instalments related to the antitrust fine of 2016 equal to around Euro 3.2 million. The group has approximately Euro 13.6 million of VAT credit (not included in Net Financial Position).
Other significant events occurred after 31 March 2018 and prospects for the full year
The first part of 2018 has seen a recovery of vending volumes, specifically in the coffee / hot beverages segment, a recovery which in any case is in line with the small changes in GDP and hours worked in the countries where IVS operates.
In this scenario IVS Group intends to continue a growth path, both through acquisitions aimed at increasing service and local density, coupled with a capex policy which will maintain a high service value and a sustainable capacity to generate margins.
In April and May 2018 were completed 3 additional acquisitions, for a provisional price of Euro 2.1 million.
The AGM held on 8 May 2018 appointed the new Board of Director, confirming all the former members for the next three years. The AGM also resolved the payment of a dividend of Euro 0.28 per share (+16.7% vs Euro 0.24 of 2017) that will be paid on 11 July 2018.
In the second part of 2018, consistently with the market condition, could be realized transactions aimed at optimizing the costs of IVS Group financial structure, that presently come mostly from the bond expiring on November 2022, that provides for a call option exercisable starting on November 2018.
