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Ivs Group reports Adjusted Net Profit up 11.4%, Revenues up 5.8% in 1H

GRAND DUCHY OF LUXEMBOURG — IVS Group S.A., a leading player in the business of automatic and semi-automatic vending machines for the supply of hot and cold drinks and snacks, reported half-year results showing a the constant growth of the group’s results.

The Interim Consolidated Report at 30 June 2018 was reviewed and approved by the Board of Director, chaired by Paolo Covre.

TRIESTESPRESSO QUADRATO
LAMBORGHINI

Half-Year Highlights

  • Total vends: 428.7 million, +4.0% compared to first half 2017
  • Consolidated Revenues: Euro 218.7 million, +5.8%, compared to 30 June 2017.
  • Adjusted EBITDA 2: Euro 50.0 million, +2.3% compared to 30 June 2017, with an EBITDA margin on sales of 22.9%. EBITDA Adjusted per working days, +2.7%.
  • Group Net Profit: Euro 14.3 million (after profits attributable to minorities of Euro 0.7 million), + 63.8%.
  • Adjusted Net Profit Euro 15.3 million (after minorities), +11.4%.
  • Net Financial Position: Euro -262.6 million, from Euro -254.1 million at 31 December 2017 (Euro -262.2 at 30 June 2017), after net payments in the first six months of Euro 41.5 million related to investments in fixed assets and acquisitions and Euro 10.3 million dividend.
  • Completed in the first six months 5 acquisitions in Italy for an enterprise value of Euro 11.0 million.

Operating performance

Consolidated revenues In the first six months of 2018 amounted to Euro 218.7 million (of which Euro 201.2 million related to the core vending business), with an overall increase of 5.9% compared to Euro 206.5 million as June 30th, 2017 (of which Euro 191.2 million in vending) and +5.2% in the vending business.

Vending revenues increased by 5.4% in Italy, by 8.0% in Spain, 13.2% in Switzerland and decrease by 2.5% in France. Coin Service division sales increased by 16.8% mainly due to the start-up of new businesses in the subsidiary Venpay S.p.A..

Vending 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. In the first half 2018 the number of working days in Spain, France and Switzerland was quite lower compared to the first half of 2017 (-3, -2.7 e -6 working days respectively), whilst it was equal in Italy.

The total number of vends in the first half was equal to around 428.7 million, +4.0% from 412.0 million of first half 2017.

Average price per vend increased was equal to Euro 46.95 cents, from Euro 46.39 cents of first half 2017 (+1.2%).

During the first six months of 2018, IVS completed 5 acquisitions in Italy, with an Enterprise Value of Euro 11.0 million, contributing Euro 2.4 million to sales on pro-rata basis from the date of the acquisition.

Adjusted EBITDA increased by 2.3% compared to the first six months of 2017, from Euro 48.9 million to Euro 50.0 million, with an EBITDA margin on sales in the first half was equal to 22.9%. Slighty higher the increase of Adjusted EBITDA at par working days, +2.7%.

The EBITDA in the first half 2018 was affected by some facts already mentioned with reference to the results of the first quarter: the loss on the sale of used vending machines of a newly acquired business in Switzerland, accounted above the EBITDA and not considered amongst the adjustments; the volumes lost in February due to the snowfalls and the strikes in France in the second quarter 2018; the start-up of new businesses in the Coinservice division.

Group Net Profit in the first six months of 2018 is equal to Euro 14.3 million (+63.8% from Euro 8.7 million at June 2017), after profits attributable to minorities of Euro 0.7 million (Euro 0.8 million in 2017). 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 15.3 million (after minorities), +11.4% compared to Euro 13.7 million of the first half of 2017. The reduction of previous tax grants related to former ACE rules was partially compensated by higher tax deductible depreciation on new specific capex approved in the last months by the Italian government (Industry 4.0 decree).

Net Financial Position, equal to Euro -262.6 million, from Euro -254.1 million as of 31 December 2017 (Euro -262.2 million at June 30th, 2017), after payments for investments in the first half of Euro 41.5 million, of which around Euro 27.2 million for net investment in fixed assets and Euro 14.3 million for acquisitions, including payments related to investments made in formed periods, and additional Euro 10.3 million of dividend (Euro 8.8 million in 2017).

Euro 6.4 million were also paid for the monthly instalments related to the antitrust fine of 2016. The group has approximately Euro 12.3 million of VAT credit (not included in Net Financial Position) with a slight decrease compared to Euro 12.8 million at December 31th, 2017.

Other significant events occurred after 30 June 2018 and prospects for the full year

The first half 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 – just higher than 1% – in GDP and hours worked.

In this scenario IVS Group intends to continue its continuous and solid growth path, through acquisitions aimed at increasing service and local density, combined with a capex policy which will maintain a high service value and a sustainable capacity to generate margins.

On July it was completed a small acquisition in France, in the area of Montpellier, for a value of approximately Euro 0.5 million, moreover it has been signed two preliminary agreement in Italy to acquire two vending business with a total provisional value of Euro 2.8 million.

On August it was incorporated a new legal entity, Wefor S.r.l. to which some vending business in the OCS segment are expected to be contributed.

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