GRAND DUCHY OF LUXEMBOURG – The Board of Directors of IVS Group S.A. (IVS.MI) chaired by Paolo Covre, convened on March 27th, 2018 in Seriate (BG), has reviewed and approved the Annual Financial Report at 31 December 2017, the Management Report and related documents and the Sustainability Report 2017.
The Board also resolved to propose to AGM the payment of a dividend of Euro 0.28 per share (+16.6% from the previous year).
The Board has mandated the Chairman to convene the Annual Shareholders’ Meeting, in accordance with law and the Company’s statute, on 8 May 2018, at 11.00 at Fiducenter, 18 Rue de l’Eau L – 1449, L-Luxembourg, Grand Duchy of Luxembourg, to vote on the approval of the Annual Report 2017 and related matters, the allocation of the Company’s result, the appontment of directors and the renewal of the auditors’ mandate.
Highlights on 2017 results
- Total number of vends 804.8 million, +12.0% compared to 2016.
- FY revenues amounted to Euro 409.1 million, +12.9% compared to Euro 362.3 million in 2016.
- Adjusted EBITDA: Euro 91.2 million, +10.8% compared to Euro 82.3 million in 2016.
- Adjusted EBIT: Euro 47.8 million, +12.0% from Euro 42.7 million in 2016.
- Net Profit Euro 19.5 million (after Euro 1.4 million profit attributable to minorities), +15.6% vs 16.9 million of 2016.
- Net Profit Adjusted for extraordinary items: Euro 24.5 million (after minorities of Euro 1.4 million), +12.4% compared to Euro 21.8 million of 2016.
- Net Financial Debt to Euro 254.1 million, from 225.6 million at 31 Dec. 2016, after Euro 88.2 million payments for investments in fixed assets and acquisitions, Euro 9.0 million dividend and annual instalment of Euro 12.8 million for the fine issued by the Antitrust in 2015.
- Completed during the year 16 acquisitions of companies and businesses in Italy, Spain and Switzerland, for a value of approximately Euro 37.1 million.
Operating performance
In 2017 IVS Group reached its highs in the total number of vends, growing from 718.3 million to 804.8 million; an increase of 12.0%, deriving from both external growth, and the capacity to award new clients, higher than the physiological and very low churn rate.
Consolidated revenues amounted to Euro 409.1 million, +12.9% compared to 2016.
Revenues in the core vending business grew by 13.2% (from 333.4 to 377.4 million Euro) with the following breakdown in the areas where IVS operates: +6.9% in Italy, +92.0% in Spain, +1.2% in France, + 623.9% in Switzerland and + 0.1% in the coins management business (Coin Service division). Variations in Spain and Switzerland are mostly due to the acquisitions completed in the year.
The increase in revenues in the vending business was of 2.9% on a like-for-like basis and around +2.6% net of the change effect of working days. Volumes like for like and adjusted for working days increased by 0.9% (1.4% in Italy).
The positive trend in volumes confirms the gradual recovery of consumptions in Italy and the validity of the strategy in the OCS, based on the agreement with Nespresso, which started operating at the beginning of 2017.
The average price per vend increased by 1.1%, from 46.4 Euro cents to 46.9 Euro cents per vend.
The acquisitions completed during the year contributed for Euro 32.1 million (7.8%) to consolidated sale (pro rata from the date of the acquisition).
The application CoffecAppTM which allows to purchase and pay products with smart phones at the end of the year reached over 69,000 users (+130% and around +100% in term of sales). This network, that will be further expanded and digitalised, represents the base for future important steps and for improving marketing and service effectiveness.
IVS Group continued along the year its investments policy, aimed at the continuous updating of its vending machine fleet, introducing innovative technologies and models destined to new market niches. A special impulse was also given by the tax benefits arising in Italy from the “Industry 4.0” decree, which were an incentive to increase and anticipate some capex expected in the following years.
Adjusted EBITDA, equal to Euro 91.2 million (22.3% on total sales), increased by 10.8%, (Euro 82.3 million in 2016). EBITDA reported without adjustments Euro 83.1 million.
Adjusted EBIT: Euro 47.8 million (11.7% on sales), +12.0% from Euro 42.7 million of 2016. EBIT reported without adjustments Euro 39.7 million.
2017 operating results can be even better appreciated considering the following aspects: 1) the effects of the acquisition of Ibervending in Spain completed on January 31st, 2017 and 2) the effect of the growth of sales in the OCS market segment (Nespresso agreement) with a marketing policy mostly oriented – at least in the first phase – to expand the market share.
Net Profit reached Euro 19.5 million (after profits to minorities of Euro 1.4 million), +15.6% vs. Euro 16.9 million of 2016.
Adjusted Net Profit before extraordinary items, listed as follows, amounted to Euro 24.5 million (after profits to minorities of Euro 1.4 million), +12.4% compared to Euro 21.8 million of 2016.
Amongst non recurring items (adjustments) are to be mentioned: 1) the final provisions for the Antitrust fine accounted for on June 2017, equal to Euro 3.3 million; 2) transaction and redundancies costs related to acquisitions for Euro 2.2 million; 3) price increase related to acquisitions completed in previous years for Euro 1.5 million; 4) tax provisions, Euro 0.7 million; 5) the capital gain on the sale of minority interests in France (consolidated at equity) of Euro 3.0 million.
Net financial debt is equal to Euro 254.1 million, from Euro 225.6 million at the end of 2016. In 2017 IVS Group has made payments for investments totaling Euro 88.2 million, of which Euro 48.5 million for net fixed assets (including the balance for capex made in 2016) and Euro 38.2 million for acquisitions. Approximately Euro 32 million capex are eligible for the benefits related to “industry 4.0” decree. During 2017 were also paid Euro 9.0 million dividend and instalments for the Antitrust fine of Euro 12.8 million (Euro 16.0 million since 2016). The VAT credit, Euro 12.8 million at year end, is not included in the net financial position.
Around 95% of net financial debt is represented by Euro 240 million of IVS Group notes, due 2022, issued on November 2015, fixed interest rate of 4.5%. This bond is callable starting from at the third year from the issue (November 2018), at the price of 102.25. In addition to the liquidity available on bank accounts, the group has unused committed term loans for an amount of around Euro 65 million.
Significant events occurred after the end of 2017 and outlook for the current year
On 8 January 2018 IVS Italia acquired the business of Enopanorama S.r.l. for a price of Euro 7.1 million.
The Chairman of IVS Group, Paolo Covre, with reference to the past year and to 2018 prospects, commented:
“The performance of 2017, with results that reached new highs, confirms the validity of the company policies, set by our unforgettable Cesare Cerea. The beginning of 2018, although in a scenario that remains highly competitive and uncertain even for external factors, seems to support new phases of development for IVS Group.
The objective of IVS remains to consolidate its leadership in Italy and continue a balanced and profitable growth in other selected European markets. The basis of this strategy, on the eve of changes related to digitization, that will affect the vending sector, will be – as always – the quality of service and human resources, together with the flexibility and capacity for innovation of our organisation. All this, in the continuous control of the company’s financial solidity and excellent economic results “.
