Zurich, 28 August 2015
The Aduno Group faced a demanding economic environment in the first half of 2015. The discontinuation of the euro/Swiss franc floor burdened both the card business and the credit and leasing business. The Aduno Group nevertheless managed to increase its sales volume to CHF 225 million and its net profit by 5.6 per cent to CHF 38 million, up slightly on the prior-year period. The favourable interest rate environment was used to float two bonds.
The Aduno Group, Swiss specialist for cashless payment, personal loans, leasing and security guarantees, reported further growth during the first half of 2015. It posted sales of CHF 225 million for the first half of 2015, which represents growth of 0.9 per cent compared to the same period in the previous year, something of a success in light of the challenging market environment. Both business divisions – the Payment division, comprising the Issuing business (Viseca Card Services SA), the Acquiring business (Aduno SA) and AdunoKaution AG, as well as the Consumer Finance division with the credit and leasing business of cashgate AG – contributed to this growth. The Group invested significantly in digital transformation and mobile payment projects during reporting period, which is why operating costs increased proportionately to sales. Operating profit ended on CHF 43 million, up 5.1 per cent on the first half of 2014. This equates to an operating margin of 19.3 per cent. Pre-tax profit came to CHF 44 million, representing an improvement of 4.7 per cent. Net profit after tax grew slightly more strongly, by 5.6 per cent to CHF 38 million.
According to Martin Huldi, Chief Executive Officer of the Aduno Group, “The main priority is volume growth. We want to grow in all areas of our business and drive our activities forward. We are also focusing on our innovation projects which will generate future earnings – particularly mobile payment solutions that are based on the MasterCard and Visa card schemes.”
Increasing sales volume despite a strong Swiss franc
The scrapping of the euro/Swiss franc floor and subsequent strengthening of the Swiss franc greatly changed the framework conditions for the card business. Customer sales in foreign currency – representing around half of total sales – are now worth less in Swiss francs. In this context, it is even more encouraging that the Payment division nevertheless managed to increase its sales volume in the first six months of 2015 by 1.3 per cent to CHF 7.5 billion. The number of transactions increased by 10.8 per cent to 79 million. In the Issuing business, Viseca reported a transaction volume of CHF 3.7 billion, 2.1 per cent more than in the first half of 2014. At CHF 3.7 billion, Aduno's acquiring volume for the first half of 2015 was on a par with the prior-year period. In comparison, the debit business grew more strongly with volumes increasing by 3.8 per cent. The credit business, however, was hit twice by the strong Swiss franc: firstly, fewer tourists came to Switzerland, and secondly, shopping tourism to other countries increased. As a result, transaction volume declined by 3.6 per cent. Card sales again did well in the first half of 2015. The number of cards issued rose by 3.3 per cent on the prior-year period, partly as a result of the close collaboration with the partner banks as a sales channel.
Conrad Auerbach, Chief Financial Officer of the Aduno Group: “The reduction in the interchange fee from 0.95 to 0.7 per cent in the credit card business will have a negative impact on our earnings. Not only will Issuing income fall, but the Aduno Group will also pass the lower rate on to its affiliated merchants in the Acquiring business. The positive aspect is that the acceptance of credit cards will become more attractive for merchants, ultimately resulting in higher volumes.”
Consumer Finance posts growth in a shrinking market
Consumer Finance division – comprising the cashgate personal credit and leasing business – reported new business volume on a par to the previous year. Comparatively speaking, cashgate performed well in the per-sonal credit business during the reporting period. The new volume continued to increase in a shrinking market, highlighting the attractiveness of the price model with its respective interest rates of 7.9 and 11.9 per cent. The portfolio grew by 13.9 per cent. The growth in the personal credit business is offset by a significant decline in the leasing business, which clearly suffered from the discontinuation of the euro/Swiss franc floor. The significantly negative price trend for car imports and in the used-car market led to a portfolio contraction of 6.3 per cent.
Integration of AdunoKaution
Taken over by the Aduno Group in November 2014, the guarantee deposit company EuroKaution AG now operates on the market under the name AdunoKaution AG. It has been fully integrated into the Payment division. This has no effect on private and business customers replacing their rent deposit by a bond. Business in the first six months was on a par with the prior-year period.
Two bonds floated for CHF 100 million each
In light of the favourable situation on the capital market, Aduno Holding AG floated two Swiss franc bonds for CHF 100 million each. Both bonds run until 2017 and will contribute to reducing financing costs. The fact that these bonds were placed again within a very short period of time underlines the capital market’s confidence in the Aduno Group.
Outlook for the second half of 2015
The Aduno Group does not expect the economic environment to improve in the second half of the year. Nevertheless, the Aduno Group has again proved in the first six months that it can weather stormy seas. The Group therefore expects the result for the year as a whole to be just as good as that of the previous year.
The Half Year Report of 2015 is available at halfyearreport.aduno-gruppe.ch