Strong profitability growth in both Divisions

Group current EBITDA up to € 26.7 million, supported by record performances in both Divisions

Proposed dividend of € 0.80 per share (+27% on 2014)

Goods ID: Third consecutive year of internal growth and improved profitability.

Sales of € 204.3 million driven by sharply improved first half (+7.2% on full year 2014)

Current EBITDA of € 14.6 million (+20.5% on 2014)

People ID: operating results up strongly, supported by high added value projects

Sales of € 53.9 million (-1.3% on 2014)

Current EBITDA of € 15.5 million (+47.1% on 2014)

Press release in PDF & appendixes

Sales in 2015 amounted to € 258.2 million (vs. € 245.3 million in 2014), with current EBITDA rising to a record € 26.7 million (€ 19.2 million in 2014).

Group sales were supported by growing sales revenues in Goods ID (+ 7.2% compared to 2014), with particularly strong growth in the first half. The People ID Division undertook a number of high added value projects. The fact that these were without major hardware deliveries explains the stable sales figure (-1.3% compared to 2014).

Group gross margin reached a record € 115.6 million (+11.6%). This represents 44.8% of sales (42.2% in 2014), a key factor here being the product mix of the People ID Division.

Group current EBITDA was € 26.7 million (+39.0%), supported by record performance in both Divisions: € 14.6 million in Goods ID (+20.5%) and € 15.5 million in People ID (+47.1%). With non-current items not significant, Group EBITDA also grew significantly to € 26.3 million (+44.3%).

The Goods ID Division enjoyed another year of growth, with internal sales growth and significantly increased profitability. Sales seasonality was less marked than in previous years, mainly because a number of large volume contracts were executed in the first half. The Division is benefiting from the key solutions commercial strategy it introduced in 2012, particularly in the retail, postal services and transport sectors. Its serialization solution (ZetesAtlas) for production units is also growing strongly, even if its impact on the Division's sales remains more limited.

In People ID, sales were stable, -1.3% compared to 2014. This evolution reflects the higher portion of services in the product mix. While a large batch of biometric registration kits was delivered to Uganda in 2014, no equivalent delivery took place in 2015. Compared to 2013, more similar in terms of product mix, growth was 33.8%. The execution of the various long and short term contracts enabled the division to significantly increase its profitability, with a record current EBITDA of € 15.5 million (+ 47.1% compared to 2014).


  1. "Current" excludes restructuring expenses and other non-current items (badwill/other)
  2. Attributable to the equity holders of the parent company

Provisions, depreciation, amortization and impairment losses were higher at € 9.6 million. This increase was particularly marked in the People ID Division (see below).

Financial expenses and financial income both increased significantly, mainly owing to larger foreign exchange results. In 2015, foreign exchange losses amounted to € 1.4 million and gains to € 1.1 million. The financial result for the year (financial income less financial expenses), however, remained in line with 2014: € 0.8 million vs. € 0.6 million. This relatively low level reflects both the macro-economic environment with low interest rates and the good solvency of the Group (net cash). Finally, taxes remained high, at € 5.2 million, or 32.5% of the result before taxes.  This rate is in line with the rate applicable in Belgium, the Group's operations centre.

The 5.3% increase in sales revenue between 2014 and 2015 converts, by a leverage effect, into a 73.2% rise in net profit € 10.7 million. 

Analysis by half-year 

The second half confirmed the good performance of the first half, with a slight increase in turnover and in EBITDA. EBITDA for H2 2015 was also up 20.3% on H2 2014.

The development by Division is discussed below.

  1. Goods ID

For the third year in a row, the Goods ID Division improved its performance, with sales up 7.2% to a historic record € 204.3 million. This performance is all the more remarkable for being internally generated. It is the fruit of the key solutions strategy introduced in 2012 which, year after year, is bearing fruit.

The trend remained good throughout the year, with high order intake and a marked interest in the Group's solutions.

The key solutions are making an important contribution to the results and in particular to the gross margin of the Division. Gross margin as a percentage of sales remained stable (39.4% vs. 39.2% in 2014) under the combined effect of declining margins on hardware and higher margins on solutions.

The impact is particularly sensitive in times of rising sales: maintaining the gross margin on sales enabled the Division to generate € 5.3 million of additional gross margin compared to 2014. With operating expenses under control, the Division increased its current EBITDA by 20.5%.

Zetes continues to refine its key solutions along with its mobility platform that allows sector-specific applications to be developed and implemented for mobile devices and communication protocols of every type. These development efforts translate into stable investments in R&D and slightly increasing depreciation and amortization: € 2.3 million in 2015, which is close to the R&D capitalization level for the year and compares with € 2.1 million in 2014. Depreciation of other non-current assets amounted to € 3.2 million. Other provisions, depreciation, amortization and impairment losses together totalled € 0.9 million. Half these amounts relate to stock write-downs, the other half to impairments on receivables. In all, non-cash expenses were EUR 6.4 million, up EUR 8.1% on 2014.

As a result, the Division generated a current EBIT of € 8.2 million, up 32.4% on 2014.

Analysis by half-year

The seasonal pattern of sales in 2015 was unusual. Sales are traditionally much higher in the second half, but in H2 they were up just 2.6% on first half. This trend was expected, as several major contracts had been executed in the first half. Gross margin as a percentage of sales moved in the right direction, with 40.5% in H1 2015 and 38.4% H2 2015, vs. 40.4% in H1 2014 and 38.2% in H2 2014.

Revenue grew in 2015 much faster than the economy and business investment. Zetes owes this outperformance to its strategy which allows it both to continuously increase its recurring revenues and win important contracts in promising sectors like postal services.

Exchange rate fluctuations significantly impacted sales figures, but with a less marked effect on EBITDA. The main changes were the appreciation (vis-à-vis the euro) of the Swiss franc and the pound sterling, offset by the depreciation of the South African rand. At constant exchange rates, sales revenue and gross profit would have been 4.4% and 5.3% higher respectively. The positive impact of exchange rates on current EBITDA is € 0.5 million.

All the growth is internally generated, with the Division remaining focused on pursuing its growth-generating key solutions strategy.

  1. People ID

In People ID, sales revenue remained stable in 2015 (-1.3%) but margins were up sharply with a change in product mix. Compared to 2014, the hardware component of projects delivered in 2015 was low, with a greater percentage of Software and Services components. The added value of Zetes’ software solutions not only differentiates it from the competition: it is also is a major factor in the structural improvement of the Division's results.

This, together with good cost control, made possible a significant increase in the Division's profitability. 

In 2015, long-term concessions contributed significantly to revenue and results, while the short-term contracts, such as electoral projects, featured a very significant software component.

Côte d'Ivoire has decided to introduce a social security system. For deploying it, the Ivorian Government has commissioned Zetes to develop the infrastructure for enrolment and for the biometric social security card. This represents a new and promising type of project, bearing in mind that United Nations is pushing all countries without them to set up social security systems that are accessible to all their citizens. Elsewhere, from 1 May 2015, the Senegalese government removed the requirement for biometric visas in order to support the tourism industry, and therefore terminated Zetes' technical concession.  This decision necessitated the accelerated charging of the capitalized start-up charges (IAS 11, non-cash expenses), offset by a first tranche of compensation.

The People ID Division relies on its continuous business development efforts. The aim is to spread the message of Zetes' value proposition for biographical and biometric enrolment, the secure management of population databases, and for electronic and biometric identity documents. Business development is the key to good geographical diversification and a healthy balance between long and short-term contracts.

Overall, the Division's current EBITDA rose by no less than 47.1% to € 15.5 million (€ 10.6 million in 2014).

The increase in provisions, depreciation and amortization reflects mainly the accelerated charging of investment costs and stocks related to the Senegal visa contract (impact: € 0.5 million).

Analysis by half year

The breakdown by half-year shows the stability of the Division's sales revenues.  Current EBITDA as a percentage of sales topped 30% in the second half (28.8% over the year), which is above the forecast 25%.  Margins are of course influenced by the heavy investment required on long-term projects and the imperative need to present demanding certifications and relevant references.  This growth in the second half illustrates the way margins can differ depending on the type of contract, including the relative proportion of software/services and hardware.

  1. Group

The costs of the Corporate Division amounted to € 3.5 million, in line with the figures for 2014 (-0.7%). The Corporate Division's missions continue to be strategy definition, financial control, marketing and acquisitions. 

All Divisions together, (Goods ID, People ID and Corporate), the company generated a current EBITDA of € 26.7 million, the best recorded performance to date.

In terms of earnings per share, Zetes for the first time exceeded € 2 per share.

  • (1) Calculated based on the weighted average number outstanding shares
  • (2) Attributable to equity holders of the parent company
  • (3) "Current" means excluding restructuring charges and non-current income/ costs


Fixed assets rose sharply, mainly due to the consolidation - via the acquisition of companies - of a € 5.0 million building used for producing and personalizing secure documents in Belgium. The goodwill increase (€ 0.6 million) also relates to this transaction.

With investment (€ 2.6 million) running at the same level as amortization (€ 2.4 million), intangible assets – essentially capitalized R&D– barely changed.

Inventory was stable, while receivables (customers and other current receivables) were down € 5.3 million. Cash and equivalent increased very positively with a balance at 31/12/2015 of € 22.3 million.

The 2015 performance obviously positively impacted the Group's debt structure, with net cash increasing to € 9.6 million at year-end (€ 1.7 million at end-2014).

The total balance sheet grew slightly to € 188.7 million, against € 184.5 million in 2014 (+ € 4.2 million). Working capital too was up, to € 14.1 million from € 13.2 million. This latest development was limited due to a significant reduction of current assets and liabilities.

With a very strong equity of € 89.7 million, up € 10.1 million on 2014 and a balance sheet total of € 188.7 million, the solvency ratio was 47.5% (43.14% in 2014). The increase in equity is very large given the distribution in 2015 of a dividend of € 3.3 million. Equity has, however, benefited from the sale of € 2.3 million of treasury shares, among others to Zetes executives exercising share options.

LT debt increased significantly (+ € 3.4 million). The increase consists of debts for financing of the building, which were on the balance sheets of the companies acquired in July 2015 (see below).

Zetes is committed to maintaining a strong balance sheet structure. This allows it to bid for and, where successful, to manage very large deals, in which the income streams can follow well after the capital outlay (People ID concessions), and to inspire confidence to potential customers such as governments, with which it signs multi-year contracts.


Operating activities generated a cash flow of € 20.0 million over the year.  This breaks down into significant cash flow from P&L, which rose significantly to € 20.2 million, reflecting the significant increase in operating income, and a stable working capital requirement (€ -0.2 million). 

€ 4.6 million was invested in non-current assets, which is less than in 2014. The larger part of these investments relate to the Goods ID Division (€ 2.9 million), with the other € 1.7 million invested by the People ID Division.

Capitalized R&D expenses remained stable at € 2.6 million. These relate exclusively to the Goods ID Division, and are divided as always between the development of the MCL software and that of the application solutions, which form the basis of the new strategy. The R&D effort in People ID is also significant, but the cost is included in the investment in the new concession projects (building contracts) or charged directly.

In terms of financing, the year’s results permitted a net repayment to banks (financing / leasing / overdrafts) of € 5.4 million. Zetes also paid a dividend (€ 3.3 million).

Together these movements increased cash and equivalents by € 5.5 million.


During the summer of 2015, Zetes completed the acquisition of two companies, which together hold a building rented by Zetes for its secure document production activities in Belgium. This acquisition, in the amount of € 1.1 million (cf. cashflows relating to investment activities) , consists of an asset valued at € 5.0 million and bank debt of € 3.4 million. The consolidation of these subsidiaries generated goodwill of € 0.6 million.

Zetes remains attentive to acquisition opportunities, both geographical and technological. No potential acquisition of sufficient quality and meeting Zetes' criteria appeared in 2015.


In Goods ID, sales growth, which had been continuous since 2012, was boosted in the first half 2015 by a major project in Switzerland. The Division has set itself the objective to achieve in 2016 a revenue along the same lines without the benefit of a rollout similar to that of the first half of 2015. The H1/H2 distribution is expected to return to normal in 2016, that is the company expects to have a stronger second half than the first. Efforts to develop the recurrent part of revenues are gradually increasing visibility on margins. The Division continues to benefit from its key solutions commercial strategy. These solutions are proving highly successful, in particular in the postal services and transport sectors. The serialization solution (ZetesAtlas) deployed in production units is also growing strongly, generating limited sales revenues but attractive earnings. 

Developing the recurring business model remains a cornerstone of the Division’s strategy. It responds to customers' need for ongoing support, develops the ongoing relationships with them and increases the Division's financial visibility.

In People ID, the current Build and Operate contracts are making a very significant contribution to sales and profitability.  In 2016, existing concessions will all contribute to the good performance of the Division. The business development efforts should feed the revenues from short-term contracts and from time to time generate new long-term contracts. The business development team continues to grow and expand in order to ever closer, both geographically and technically, to its potential customers.

In conclusion, the strategies introduced in both Divisions are bearing fruit and are permitting sustained and profitable internal growth, as evidenced by the figures for 2015.  The Group is confident of achieving in 2016 a performance of the same order as that of 2015, with seasonality back in line with the historical pattern (the second half being expected to be better than the first).


Investing in Zetes shares has risks attached. These risks are described in the annual report and continue to apply.


In 2015, Zetes Industries divested 92,694 own shares, including 57,694 as part of the exercise of options (staff plan). In total, these transactions generated € 2.3 million of cash. At 31 December 2015, Zetes held 174,242 treasury shares (266,936 at end- 2014), representing 3.23% of the issued shares. These are intended primarily to respond to the exercise of options by Company executives.


Given the strong cash flow generated by the Group in 2015 and confident in the future, the Board will propose to the Annual General Meeting that it declare a gross ordinary dividend per share of € 0.80, up 27% compared to the previous year.


The financial statements, the publication of which has been approved by the Board of Directors on 16 March 2016 and are presented below, are a summary of the annual report which will be available on 25 April 2016. They are drawn up in euros and are in conformity with IFRS standards as adopted by the European Union.


The audit of the annual accounts is under way. The Statutory Auditor has confirmed that its audit procedures, which are substantially completed, have not revealed the need for any material correction to the accounting information contained in the press release.


Publication of the Annual Report: 25 April 2016

Ordinary General Meeting: 25 May 2016