Dr Pierin Vincenz, Chairman of the Board of Directors

EDITORIAL

Ladies and Gentlemen

The Aduno Group posted a consolidated revenue of CHF 583.0 million and at CHF 118.5 million, net profit was 58.8 per cent up on the previous year.

In the past year, the Aduno Group posted impressive volume growth: the number of issued credit cards rose to over 1.4 million by the end of the 2016 financial year. As these cards are actively used by the customers, transaction volumes exceeded the threshold of CHF 8 billion for the first time in 2016. Our merchants did similarly well in the past year: the Aduno Group’s merchant sales volume also broke through the CHF 8 billion barrier for the first time.

The reflection of this growth in the figures is quite impressive: turnover climbed by 20.4 per cent in 2016 to CHF 583.0 million, the operating result improved by 63.0 per cent to CHF 137.0 million, and net profit amounted to CHF 118.5 million, 58.8 per cent more than in the previous year. The result includes a substantial one-off contribution paid to the Aduno Group as a member of Visa Europe Ltd. following the latter’s takeover by Visa Inc., but even without this exceptional item, the Aduno Group posted an impressive organic increase in volumes that compensated for the regulatory reduction in the interchange fee in the cards business and the lower maximum interest rate for personal credits and outstanding credit card balances.

Both business units of the Aduno Group – Payment, comprising the Issuing business of Viseca Card Services SA (Viseca), the Acquiring business of Aduno SA (Aduno) and the guarantee deposit business of AdunoKaution AG (AdunoKaution) and SmartCaution SA (SmartCaution), and Consumer Finance with cashgate AG (cashgate) – contributed to this result. The impressive growth posted for the Payment business was to a large extent boosted by good consumer sentiment, but once again also confirms the efficiency of our sales organisation and the good collaboration with our partner banks. In 2016, the Payment business focused intensely again on digital payment solutions. The VisecaOne app has become the most successful Swiss financial app in its category with more than 500,000 registered users. The focus also fell on developing the technical expertise needed to handle mobile payment solutions, i.e. where smartphones can be used to pay for transactions.

In contrast to the cards business, the Consumer Finance business could not count on support from a friendly market environment. Just the opposite in fact: both the market for personal credits and the leasing market were in decline in 2016. Against this backdrop, cashgate did very well and increased its new business as well as the size of its portfolio in the personal credit business. By making clever modifications to its price model, cashgate made sure that it can offer attractive conditions, even in the wake of the recent regulatory changes. In parallel with the shrinking overall market, the leasing business also sustained a decline in new volumes. In both these segments, cashgate managed to improve customer loyalty and target new customer groups by launching innovative products. In general, the results for 2016 confirm that cashgate has a robust business model.

In the current year, the Aduno Group will continue to play its part as a leader of innovation in the Payment and Consumer Finance sectors, to strengthen its market position and to further grow its volumes. We will invest another CHF 30 million in the implementation of digital technologies and projects. As a centre of competence for cashless payment, the Aduno Group is supporting its partner banks on the road to a digital future. We will be helped along this road in 2017 by the market environment: general consumer sentiment should remain positive, and the trend towards using cards rather than cash for payment – supported by the digital progress and cheaper conditions for merchants as a result of the lower interchange fee – will continue. The outlook for the personal credit business is stable, but the leasing business is likely to remain under pressure.

The Aduno Group therefore expects 2017 to be another good year. We will do everything we can to keep volume growth high. A headwind is created by the continued regulatory interference in the market. The domestic interchange fee will be reduced for the second time to 0.44 per cent on 1 August 2017. Together with the lower maximum interest rate, this will cause margins to fall. The Aduno Group will therefore shift its focus in 2017 to strict cost control and efficiency enhancement in order to maintain its income levels in an environment of falling margins.

It is only through the efforts of our employees that we can once again report outstanding results for the Aduno Group. They worked hard on behalf of the company at all levels and we would like to thank them for this commitment. We would also like to thank our customers for their trust and our partner banks for their support. We would be delighted to continue to count on this support going forward.

Dr Pierin Vincenz
Chairman of the Board of Directors