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Saturday 14 December 2024
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Ivs Group reports 1Q revenues of €79.5m, net financial debt decrease despite the pandemic

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GRAND DUCHY OF LUXEMBOURG – The Board of Directors of IVS Group S.A.., convened on May 13th, 2021, and chaired by Mr. Paolo Covre, examined and approved the Interim Financial report at 31 March 2021. IVS Group S.A. is the Italian leader and the second player in Europe in the business of automatic and semi-automatic vending machines for the supply of hot and cold drinks and snacks (vending).

The core vending business is mainly carried out in Italy (79% of sales), France, Spain and Switzerland, with around 228,000 vending machines; the group has a network of 87 branches and around than 2,800 employees. IVS Group serves more than 15,000 corporate clients and public entities, with over 600 million vends in 2020.

IVS Group: Operating performances

Consolidated revenues in 1Q 2021 reached Euro 79.5 million (of which 70.1 million related to the core vending business), -20.6% from Euro 110.1 million of 1Q 2020 (Euro 88.3 in vending). Sales decreased by 21.3% in Italy (-20.8% net of other non-vending revenues, related to other product sale), by 25.5% in Spain, 7.2% in France, 13.5% in Switzerland and 17.0% in Coin Service division.

France enjoys a lower decrease compared to the other markets thanks to the positive contribution of Paris Metro contract; Coin Service division includes the sales in the payment services business (Moneynet), that generates the largest part of its turnover in the fourth quarter and being still in a turnaround phase brings a negative contribution to the group.

The sales decline affecting all the business areas, is due to the decrease of the worked hours in most of the client segments, and to lower people presence in public locations where are placed IVS activities. The quarter comparison is particularly negative for the 1Q 2021 considering that in 2020 January and February did not suffer so much the pandemic effects, that became more and more evident since March 2020.

The total number of vends at March 2021 was equal to 153.2 million, -17.7% from 186.2 million at March 2020, whilst is it almost equal to the total of the 4Q 2020 (153.9 million vends), that was affected as much as 1Q 2021 by the anti-pandemic measures.

Even in the context of the exceptional situation, IVS continues to have an acquisition rate of new clients higher than the churn rate.

Average price per vend in 1Q 2020 was equal to Euro 45.8 cents, from 47.4 cents of 1Q 2020 (-3.4%). That was affected by the lock-down and relevant volumes decrease in the public and travel market segments, that usually enjoy higher average selling prices and added value compared to the corporate sector and where the affiliated customers pay for their drinks via electronic keys.

EBITDA reported is equal to euro 14.0 million, decreased by 50.1% compared to Euro 28.1 million at March 2020 (that included an extraordinary income of Euro 8.0 million related to Antitrust fines reimbursement. Adjusted EBITDA¹ is equal to Euro 13.6 million, -36.9% from Euro 21.5 million at March 2020, with a 17.1% EBITDA margin (19.2% is calculated net of positioning fees).

1Q 2021 Adjusted EBITDA is higher than Euro 13.3 million of 4Q 2020, confirming the continuing pandemic effects in the period.

The total lock down of entire client segments, like schools and universities, and the reduced presence in public and travel locations, as metro, railways stations and airports, strongly affected volumes, sales, and margins of 1Q 2021, similarly to the previous quarter.

¹ “Adjusted EBITDA’’: is equal to operating income, increased by depreciation, amortisation, write-downs, non-recurring costs and exceptional in nature

Consolidated Net Result at March 2021 is equal to Euro -2.2 million (almost zero profits attributable to minorities) compared to Euro 8.7 million of 2020. The Net Result Adjusted for the exceptional items is equal to Euro -2.5 million, from Euro 1.8 million at March 2020.

Net Financial Position (“NFP”), is equal to Euro -337.7 million (including Euro 49.5 million debt deriving from rent and leasing contracts according to the definitions of IFRS 16), with a decrease of Euro 16.0 million from Euro 353.8 million at the end of 2020.

The comparison with the Net Debt at March 2020, equal to Euro 394.5 million, is even more significant. During a very complex year, with strong decrease of sales caused by the pandemic, IVS Group was able to generate a free cash flow and a reduction of the net financial debt for an amount of Euro 56.8 million.

During the first quarter 2021, although with slowed-down capex, were made payments for net investments for Euro 6.5 million, of which Euro 6.2 million for investment in fixed assets – including those linked to newly acquired businesses and done in previous quarters – and Euro 0.3 million for payments related to acquisitions. Net Financial Debt includes also Euro 2.3 million of quarterly accrued interest on bonds.

Although reduced compared to previous periods, as of 31 March 2021 the group still has significant VAT credits of Euro 8.0 million, not included in the Net Financial Position

Other significant transactions and events occurred after 31 March 2021, Covid-19 effects and forecast

On 1 April 2021, IVS Italia acquired from DAI 24 S.r.l. the 70% of IVS H24 S.r.l., a company active in H24 automatic shops, with normal sales of over Euro 1 million. During 1Q 2021 the economic scenario registered weak consumptions, basically continuing the trend of 4Q 2020. The measures aimed at containing the pandemic effects, after the summer 2020 that had seen a certain easing of the lack-down, were reinforced since October 2020.

Although with some differences amongst the business areas where IVS operates, vending volumes and consumptions were always around one third lower compared to the pre-pandemic periods. Since mid-April some recovery signals were registered, together with the gradual reopening of businesses, but the business trend is still affected by the continuing lock-down of some sectors (i.e. schools and universities, representing around 15% of total group sales), the not full reopening of the transport sector (around 10% of sales), and a generally still weak level of worked hours.

In this context, IVS Group succeeded to maintain quite a satisfactory operating profit level, thanks to timely and effective actions aimed at reducing of all of the major costs (personnel, rents, positioning fees), as already mentioned in previous quarters. The positive operating profits, however diminished, associated to a downsizing of investments, made possible to generate a relevant free cash-flow.

The financial situation is therefore strong, with liquidity that is even exceeding the normal operating needs. In a market where the pandemic has certainly hit everybody, but even more the weak and marginal players, IVS Group stands therefore in a relative strong position to grow again, in absolute values and in terms of market share, in all of the areas where the group operates.

CIMBALI

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