Aduno Group records a strong performance in the first half of 2019

The Aduno Group can look back on a successful first half of 2019. The Payment division took advantage of a favourable trading environment and a boost from the acquisition of Accarda to post a considerable increase in the volume of business. The Consumer Finance division maintained its position in the hard-fought personal credit market and achieved growth in the leasing business.

This Half Year Report has been prepared in accordance with the accounting standard Swiss GAAP FER for the first time.

In the first half of 2019, the Aduno Group benefited from a healthy trading environment, marked by positive consumer sentiment in Switzerland, low interest rates and a low euro/Swiss franc exchange rate. It made good use of these conditions and increased the number of cards and the volume of transactions to new record levels. An additional boost to growth came from the full acquisition as at 1 October 2018 of Accarda, which specialises in customer cards with a payment function, mobile payments, gift cards and rewards programmes.

For the first half of 2019, the Aduno Group recorded turnover of CHF 282.4 million, an increase of 19.2 per cent compared to the same period last year. This growth was attributable chiefly to Accarda, but organic growth was also robust at 4.0 per cent. Both divisions – Payment, which in addition to Accarda also includes the issuing business of Viseca Card Services SA (Viseca) and finance management specialist Contovista AG (Contovista), and Consumer Finance with cashgate AG (cashgate) – registered growth compared to the prior-year period.

The Payment division recorded a 12.4 per cent increase in commission income on the back of expanded business volumes. 6.9 percentage points of this was the result of organic growth, while the remainder came from Accarda. The level of new card sales remained gratifyingly high, which was reflected in rising annual fees and will generate higher commission income in the future. The effect of the Accarda purchase can be clearly seen in interest income and other operating income, which rose by 31.3 per cent and 30.8 per cent respectively. Naturally, the Accarda acquisition, while generating higher income, also meant higher expenses. Personnel expenses rose in particular, as did amortisation of the acquired intangible assets and goodwill for a limited period.

As a consequence, the ordinary result for the first half of 2019 was 17.1 per cent below that of the prior-year period, at CHF 46.5 million. Net profit in the first half of 2019 amounted to CHF 34.3 million, compared to CHF 44.6 million in the first half of 2018.

As at mid-2019, the Aduno Group employed 913 staff (full-time equivalents), versus 731 staff as at the end of 2018. This rise was attributable to the employees from Accarda following its acquisition.

The switch to Swiss GAAP FER reduced the Aduno Group’s equity as at 30 June 2019 to CHF 643.8 million, equating to an equity ratio of 22.3 per cent, which is still solid.

Payment business grows at all levels

In the cards business, the Aduno Group achieved an 8.5 per cent increase in its transaction volumes in the first six months of 2019 to CHF 5.2 billion. While volumes in Switzerland rose by 12.3 per cent, volumes abroad registered growth of 4.2 per cent. The sharp rise in card transaction volumes in Switzerland reflects the ongoing substitution of cash, particularly in shops, restaurants, travel and entertainment. Relatively weak growth abroad was attributable to a lower euro exchange rate and the partial shifting of transaction volumes from abroad to Switzerland. Online business with foreign retailers and service providers as well as hotels and restaurants again recorded an above-average performance.

In the Swiss bricks-and-mortar business, the onward march of contactless payments continued. In the first half of 2019, for the first time more than half of all transactions were contactless, at 52.8 per cent. This is up sharply on last year’s figure of 38.5 per cent. Consumers like being able to make quick and easy contactless payments for their everyday purchases using a card, including for relatively small amounts. As part of its digitisation strategy geared to customer needs, in June 2019 the Aduno Group introduced contactless payments via Samsung Pay. This means that customers with a Samsung smartphone or smartwatch can make payments easily and securely wherever contactless payments are available as well as in many online shops in Switzerland and abroad.

The number of cards climbed to a record 1.6 million. New sales of credit cards remained at a high level, attributable to strong distribution work at customer banks. Banking packages that include credit cards are particularly popular with customers. The “one” app also enjoys great popularity, being Switzerland’s most loaded and most used card app. New functions were added in the period under review: customers can now order a replacement card directly through the app, while the analytics functionality enables them to analyse their expenditure according to various categories.

The analytics functionality is based on Contovista’s Personal Finance Manager (PFM), which a number of banks have now integrated into their own apps. In addition, in the first half of 2019 Contovista launched a Business Finance Manager (BFM). This digital financial assistant enables business customers of customer banks to bundle all their banking relationships into a single solution. This not only gives them greater security and an unrestricted overview of their financial position; it also saves them valuable time they can instead devote to their core business.

Leasing drives growth in the Consumer Finance business

The Consumer Finance division, featuring the cashgate personal credit and leasing business, posted an increase in new business in the first half of 2019 of 4.4 per cent to CHF 521.4 million. This enabled cashgate to just about maintain its position in a hard-fought market.

New volumes in the personal credit business stagnated in the first six months, following growth in the prior-year period. However, overall volumes rose by 4.4 per cent compared to the end of 2018.

The leasing segment increased its new volumes by 9.9 per cent in the first half of 2019. Overall volumes were up 6.5 per cent versus the end of 2018. Growth was driven mainly by a major strategic partner.

On 30 June 2019, Aduno Holding signed an agreement to sell cashgate AG to Cembra Money Bank AG. Completion of the transaction is subject to the usual conditions and is scheduled for the third quarter. For about a year the Aduno Group will provide services to Cembra Money Bank in various areas, such as finances, HR, IT and collections, as a transitional solution.

Payment turnover

[in CHF billion]

Card transactions

[in million transactions]

Consumer Finance portfolio

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Consumer Finance new business

[in CHF million]