Gunnebo Group Q July 2018

Transcription

1 Gunnebo Group Q July 2018 CEO Comments Divestment of business in France, Belgium and Luxemburg Focus on key product areas new report segment structure + organisation New financial targets We are now organising ourselves to win in the market place. The new set-up will allow each Business Unit full focus on its own core business and the customers will get full attention with end-to-end customer focused organisations. At the same time, we will utilise existing skills and expertise allowing us to get full leverage which in turn will generate profitable growth. Henrik Lange, President & CEO Gunnebo Group I 19 July 2018 I page 2 Q

2 Gunnebo Plans to Divest its Business in France, Belgium and Luxembourg Local integrator business not core for the future of Gunnebo Scope: French sales company, Baldenheim, Bazancourt and the Belgian and Luxembourg business 2017 turnover: MEUR no. of employees: 930 Divestment expected to generate a transactional loss of MEUR MEUR 60 recorded in Q of which MEUR 1 is cash Divestment planned to be finalized in Q Subject to works council consultation and antitrust clearance The planned divestment of the French, Belgian and Luxembourg integrator business is in line with our strategy to become a more productfocused company. With OpenGate as the owner, this business will have the right foundation to further develop its business in line with its own clearly defined agenda. Henrik Lange, President & CEO Gunnebo Group I 19 July 2018 I page 3 Q Gunnebo to Focus on Product Planned divestment in line with Gunnebo strategy to create a more focused business around key product areas Going forward, the Group s focus will on product in the four Business Units: Safe Storage Cash Management Entrance Control Integrated Security Gunnebo Group I 19 July 2018 I page 4 Q

3 Gunnebo Organisation as of July 19, 2018 President & CEO Henrik Lange CFO & IT Human resources & Susanne Larsson Sustainability Christian Carlsson Marketing & Communications Europe Karin Wallström Nordén Stefan Syrén Asia-Pacific, Middle East & Americas Africa Dan Schroeder Sacha de la Noë Safe Storage Cash Management Entrance Control Integrated Security Stefan Syrén Tomas Wängberg Robert Hermans Stefan Syrén Gunnebo Group I 19 July 2018 I page 5 Q The Group in Brief 4,900 MSEK Turnover ,400 No of Employees 25 Sales Companies Core Offering: Safe Storage, 35% Cash Management, 21% Entrance Control, 19% Integrated Security, 25% 100 Distributor Markets Gunnebo Group. 19 July, Page 6 Q

4 New Targets The new financial targets are: Annual sales growth of 5% EBITA of >10% Net Debt/EBITDA of <2,5 Annual dividend of 30-50% of net profit Sustainability targets will remain as defined in Gunnebo Group I 19 July 2018 I page 7 Q New Group Targets Target Previous target Growth Annual sales growth of 5% Annual Organic Growth of 5 % Profitability EBITA of >10% EBIT of 7% Net Debt /EBITDA Net Debt/EBITDA of <2.5 NEW! Dividend Annual Dividend of 30-50% of the Net Profit Annual Dividend of 30-40% of the Net Profit Sustainability Reduce use of electricity, CO 2 emissions and increase recycling All manufacturing units ISO certified All major suppliers compliant with Code of Conduct All major manufacturing units OHSAS certified Goals established in 2016 Gunnebo Group I 19 July 2018 I page 8 Q

5 Annual Sales Growth of 5% % 4% 2% 0% -2% -4% -6% -8% -10% Sales Sales growth 12M % Sales growth % Definition: Growth in net sales in constant currencies, hence including both organic and acquired growth Target is to grow the main Business Units in line with market or better. With focus on the main Business Units, the Group will be better structured to capture growth in the market. Gunnebo Group. 19 July, Page 9 Q EBITA of >10% % 10% 8% 6% 4% 2% 0% Definition: EBIT excluding IAC and acquisition related amortization. For the Business Units, no costs for Group functions are allocated. Target is to reach a 10% EBITA through focusing on the main Business Units, driving both topline growth and margin improvements. EBITA EBITA % 12M EBITA % EBITA target defined by Business Unit will allow dedicated focus on driving improvements. Gunnebo Group. 19 July, Page 10 Q

6 Net Debt/EBITDA of < Net debt incl. post-employment benefits (PEB) Net debt Net debt incl. PEB/EBITDA Net debt/ebitda 5,50 5,00 4,50 4,00 3,50 3,00 2,50 2,00 1,50 1,00 0,50 0,00 Definition: Period end net debt excluding pension liabilities divided by EBITDA for the last 12 months Will ensure the Group s capital strength. Target will drive a clear cash flow focus by Business Unit. When acquisition is performed the Group expects the Net Debt/EBITDA to increase and over time reduce to a normalized level again. Gunnebo Group. 19 July, Page 11 Q Dividend of 30-50% of Net Profit 80% Increased from 30-40% of net profit to 30-50% will ensure good direct return 60% 40% 20% 0% Annual dividend of net profit, % The Business Unit focus will give an increased profitability enough for both reinvesting in our business while also increasing the dividend level to the Group s shareholders. By ensuring a Business Unit focus the Group will improve its profitability and thus dividends over time. Gunnebo Group. 19 July, Page 12 Q

7 Product Areas Translated Into Business Units (% of turnover) Product Area, FY 2017 Safes & Vaults, 33% Safes, vaults and vault doors, safe deposit lockers (SDLs), ATM safes, services Cash Management, 19% Deposit and recycling, closed cash management, envelope and coin-roll systems, drive-up systems, application and monitoring software, services Entrance Security, 23% Speed gates, turnstiles, electronic article surveillance, security doors & Partitions, services = = Changed Business Unit, FY 2017 Safe Storage, 35% Safes, vaults and vault doors, safe deposit lockers (SDLs), ATM safes, services Cash Management, 21% Deposit and recycling, closed cash management, envelope and coin-roll systems, drive-up systems, application and monitoring software, services Entrance Control, 19% Speed gates, turnstiles, high-security perimeter protection, services Electronic Security, 18% Access control, intrusion detection, electronic locks, services Other, 7% Fire Projects, Perimeter Protection, other third-party products New! Integrated Security, 25% Integrator business (electronic security, security doors & partitions, monitoring), electronic article surveillance, fire systems, locally traded products, service Discontinued Operations, MSEK 1,130 Gunnebo Group I 19 July 2018 I page 13 Q Business Unit Performance FY 2017, % Safe Storage 35% of sales -8% Sales Growth 7.4% EBITA Cash Management 21% of sales 8% Sales Growth 11.6% EBITA Entrance Control 19% of sales 10% Sales Growth 16.2% EBITA Integrated Security 25% of sales -6% Sales Growth 8.7% EBITA Gunnebo Group I 19 July 2018 I page 14 Q

8 Moving Into Q2 Results in New Reporting Summary of the Quarter Sales Sales Sales growth growth 2017 growth Net sales, MSEK Q2 Q2 % YTD YTD % Full year % Safe Storage ,708-8 Cash Management ,031 8 Entrance Control Integrated Security ,228-6 Total 1,248 1, ,405 2, , Margin 2017 Margin 2018 Margin 2017 Margin 2017 Margin Q2 % Q2 % YTD % YTD % year % EBITA, MSEK Full Safe Storage Cash Management Entrance Control Integrated Security Group Functions Total Net sales amounted to MSEK 1,248 (1,225), sales growth was 0% EBITA amounted to MSEK 66 (98) and the EBITA margin was 5.3% (8.0) EBITA YTD of Safe Storage, Cash Management & Entrance Control 192 (180) Gunnebo Group I 19 July 2018 I page 16 Q

9 Safe Storage In Brief SVP: Stefan Syrén (as of 1 August 2018) Offering Safes Vaults & vault doors Safe deposit lockers ATM safes Services Brands The Safe Storage Business Major Customer Segments Unit provides solutions Retail protecting data, cash and other Hospitality valuables from data intrusion, Commercial sector burglary, fire and explosion, as Warehouses storing high-value well as securing regulatory or high-risk goods, such as pharmaceuticals compliance. SME & domestic Bank Gunnebo Group. 19 July, Page 17 Q Business Unit Safe Storage Q MSEK 35% of Group Sales (YTD) Steelage brand, originally from India, launched in Africa and the Middle East towards the bank sector In Europe, sales of safes to global ATM manufacturers had a strong development Asia-Pacific had an overall positive development in the quarter, driven by sales growth in India and China In Americas sales were stable Safe Storage Q2 Q2 YTD YTD Full year SALES BY REGION, YTD 2018 Net sales, MSEK Sales growth, % EBITA, MSEK EBITA margin, % 8,9 6,8 7,5 6,6 7,4 Items affecting comparability (IAC), MSEK Operating capital employed Gunnebo Group I 19 July 2018 I page 18 Q

10 Business Unit Safe Storage Q Highlights UK: Supply chain specialist turns to Gunnebo for design, production and installation of a vault India: One of India s major gold loan companies, NBFC, places orders for customized storage inside high-graded safes for storage of gold in their outlets across the country Nepal: Safe Deposit Lockers will be installed in a leading bank in Nepal to provide storage services for customers valuables USA: JP Morgan Chase bank is extending their branch network and invests in new safes and depositories Canada: Major Canadian financial institution invests in a new large vault and entrance control solutions for new currency processing centre Gunnebo Group. 19 July, Page 19 Q Cash Management In Brief SVP: Tomas Wängberg Offering Deposit and recycling Closed cash management Envelope and coin-roll systems Drive-up systems Application and monitoring software Services Major Customer Segments Retail Bank Casino Other business managing cash Brands Business Unit Cash Management provides solutions reducing costs for retailers handling notes and coins and supporting CIT service providers and banks to improve their operational efficiency and expand their offering. The solutions include software, equipment and services that increase efficiency and safety of cash management. Gunnebo Group. 19 July, Page 20 Q

11 Business Unit Cash Management Q MSEK Cash Management Q2 Q2 YTD YTD Full year 22% of Group Sales (YTD) Global launch of new deposit solutions D1 and D3 successfully completed and orders received from Europe and Middle East While quarter one had a good development in Europe, Middle East and Asia-Pacific, the second quarter was weaker due to phasing in project deliveries. In Europe there was a good development of sales of closed cash management in Nordics and Italy In Asia Pacific, Cash management is still a small part of sales. Development was good in Australia. In region Americas, sales in Brazil were good SALES BY REGION, YTD 2018 Net sales, MSEK Sales growth, % EBITA, MSEK EBITA margin, % 12,5 13,6 11,1 13,1 11,6 Items affecting comparability (IAC), MSEK Operating capital employed, MSEK Gunnebo Group I 19 July 2018 I page 21 Q Business Unit Cash Management Q Highlights Sweden: Retailer Netto decides to optimize its cash management by installing closed cash management, SafePay Italy: Retail chain Leroy Merlin signs service contract for service of its installed base of closed cash management, SafePay Netherlands: CIT company uses cash management solutions from Gunnebo to optimize its retail offering UAE: CIT-company Transguard continues to invest in cash management solutions from Gunnebo Gunnebo Group. 19 July, Page 22 Q

12 Entrance Control In Brief SVP: Robert Hermans Offering Speed gates Turnstiles High-security perimeter protection Services Brands Major Customer Segments Public Buildings Commercial Buildings High-risk sites Metro Airport Protecting people, assets and buildings by controlling access using passage barriers and detection systems Gunnebo Group. 19 July, Page 23 Q Business Unit Entrance Control Q MSEK Entrance Control Q2 Q2 YTD YTD Full year 20% of Group Sales (YTD) Successful participation in the IFSEC exhibition (UK) and new showroom inaugurated In the first quarter, Entrance Control showed strong growth in all markets. This growth continued in the second quarter, however at a lower pace. In Europe several major deliveries were made to airports and mass transit customers Strong development in Asia-Pacific due to deliveries on major orders for high-risk sites In Americas, sales were stable SALES BY REGION, YTD 2018 Net sales, MSEK Sales growth, % EBITA, MSEK EBITA margin, % 11,5 17,2 14,6 13,1 16,2 Items affecting comparability (IAC), MSEK Operating capital employed, MSEK Gunnebo Group I 19 July 2018 I page 24 Q

13 Business Unit Entrance Control Q Highlights Italy: In the end of 2017, Gunnebo won a contract to supply entrance control to be installed at Italy s main railway stations. In the quarter, Gunnebo was awarded an extension of the contract. Germany: High-way facility provider Tank & Rast turns to Gunnebo for toilet entrance and payment solution Egypt: The Grand Egyptian Museum will guard its treasurers with entrance control solution from Gunnebo China: Metro Line 9 in Shenyang City and Line 1 in Xuzhou City install Gunnebo s metro flaps for entrance control USA: The new Observatory Entrance at the iconic Empire State Building will secure an efficient and secure entrance control of its 4 million annual visitors through gates from Gunnebo Gunnebo Group. 19 July, Page 25 Q Integrated Security In Brief SVP: Stefan Syrén Integrated Security comprises parts of the Group s offering being local integrator business within electronic security and other business that is local: Brands Integrator Business Electronic security, Security doors & partitions, Monitoring, Services Electronic Article Surveillance Antennas, Consumables Fire Systems Fire extinguishers for professional use, Fire Projects Major Customer Segments Public Buildings Commercial Buildings High-risk sites Bank Retail Gunnebo Group. 19 July, Page 26 Q

14 Business Unit Integrated Security Q MSEK 23% of Group Sales (YTD) The sales contraction from first quarter 2018 continued also into the second quarter Europe had good sales development in Italy and Central In Asia Pacific, sales were down For Americas, sales in Brazil had a good development Integrated Security Q2 Q2 YTD YTD Full year Net sales, MSEK ,228 Sales growth, % EBITA, MSEK EBITA margin, % Items affecting comparability (IAC), MSEK Operating capital employed, MSEK SALES BY REGION, YTD 2018 Gunnebo Group I 19 July 2018 I page 27 Q Business Unit Integrated Security Q Highlights Oman: Central Bank of Oman sees Gunnebo as its security advisor and preferred partner for supply of security solutions. The latest addition to the bank s security infrastructure is a reinforced electronic security platform. India: One of India s leading paint companies turns to Gunnebo for a fire detection system for fire security in their factories. Canada: Large electrical power and natural gas utility reviews its entrance security and replaces high security padlocks across complete infrastructure Brazil: The country s second largest pharmacy chain DPSP trusts Gunnebo to install electronic article surveillance in its 150+ stores Mexico: European embassy in Mexico City increases the level of its electronic security solutions Mexico: Bank Santander places major order for electronic security and services Gunnebo Group. 19 July, Page 28 Q

15 Summary of the Quarter Sales Sales Sales ) growth ) growth ) growth Net sales, MSEK Q2 Q2 % YTD YTD % Full year % Safe Storage ,708-8 Cash Management ,031 8 Entrance Control Integrated Security ,228-6 Total 1,248 1, ,405 2, , Margin 2017 Margin 2018 Margin 2017 Margin 2017 Margin Q2 % Q2 % YTD % YTD % year % EBITA, MSEK Full Safe Storage Cash Management Entrance Control Integrated Security Group Functions Total Other financial information, Q2 Q2 YTD YTD year MSEK Full Amortisation from acquisition related intangibles Items affecting comparability (IAC) EBIT Net profit for the period Earnings per share, SEK Discontinued operations Net profit for the period Earnings per share, SEK Net sales amounted to MSEK 1,248 (1,225), sales growth was 0% EBITA amounted to MSEK 66 (98) and the EBITA margin was 5.3% (8.0) EBIT amounted to MSEK 52 (81) and the EBIT margin was 4.2% (6.6) Net profit for the period, incl. discontinuing operations was MSEK -605 (39) Earnings per share from continuing operations was SEK 0.25 (0.40) Free cash flow was MSEK -63 (-76) Continuing and discontinued operations Net profit for the period Earnings per share, SEK Free cash flow Gunnebo Group I 19 July 2018 I page 29 Q EBIT and EBITA by Quarter, MSEK Gunnebo Group I 19 July 2018 I page 30 Q

16 EBIT Bridge by QTD, MSEK EBIT BRIDGE Q2 EBIT Sales growth 0 Structure 8 Currency 4 Other -41 EBIT Gunnebo Group I 19 July 2018 I page 31 Q EBITA Margin by Quarter, % Gunnebo Group I 19 July 2018 I page 32 Q

17 Group Income Statement, MSEK MSEK Q2 Q2 YTD YTD Full year Net sales 1,248 1,225 2,405 2,397 4,861 Cost of goods sold ,728-1,690-3,447 Gross profit ,414 Selling and administrative expenses ,127 Other operating income and expenses, net EBIT Financial income and expenses, net Profit before taxes Income taxes Net profit for the period from continuing operations Net profit for the period from discontinued operations Net profit for the period Net profit attributable to: Shareholders of the Parent Company Non-controlling interests Net profit for the period Earnings per share, SEK Of which, continuing operations, SEK Of which, discontinuing operations, SEK Earnings per share after dilution, SEK Of which, continuing operations, SEK Of which, discontinuing operations, SEK Gunnebo Group I 19 July 2018 I page 33 Q Discontinued Operations Q Gunnebo has signed an offer from global private equity firm OpenGate Capital to acquire Gunnebo s business in France, Belgium and Luxembourg to. Gunnebo intends to accept this offer, subject to works council consultation and antitrust clearance. The transaction is expected to be finalized during the fourth quarter The divestment includes the French sales company, production facilities in Baldenheim and Bazancourt as well as the Belgian and Luxembourg business MSEK Q2 Q2 YTD YTD Full year Net sales ,130 EBIT from operating activities Result from operating activities Loss on divestment Net profit/loss from discontinued operations Total assets of disposal group held for sale 484 1, ,000 1,021 Total liabilities of disposal group held for sale Net sales for discontinued operations in the second quarter amounted to MSEK 270 (285) Safe Storage: 20% Cash Management: 8% Entrance Control: 3% Integrated Security: 69% EBIT related to the operations amounted to MSEK -21 (11) and net result from operating activities amounted to MSEK -16 (8) The loss on the divestment recorded in the quarter was MSEK -609 Gunnebo Group I 19 July 2018 I page 34 Q

18 Free Cash Flow, MSEK Continuing and Discontinued Operations MSEK 2018 Q Q YTD 2017 YTD 2017 Full year Operating profit Depreciation Amortisation- acquisition-related intangibles Write-down of goodwill and other assets Amortisation - other intangibles Other Change in working capital Operating cash flow Investing cash flow excluding acquisitions Free cash flow Gunnebo Group I 19 July 2018 I page 35 Q Free Cash Flow by Quarter and Last Twelve Months, MSEK Continuing and Discontinued Operations Free cash flow 12M Gunnebo Group I 19 July 2018 I page 36 Q

19 Net Debt/EBITDA Continuing and Discontinued Operations MSEK Gunnebo Group I 19 July 2018 I page 37 Q Group Targets & Outcome Q2/YTD 2018 Target Q2 Outcome YTD Growth* Annual Sales Growth of 5% 0% 0% Profitability* EBITA of >10% 5.3% 5.9% Net Debt /EBITDA** Net Debt/EBITDA of < Dividend** Annual Dividend of 30-50% of the Net Profit 60% FY 2017 Sustainability** Reduce use of electricity, CO 2 emissions and increase recycling All manufacturing units ISO certified All major suppliers compliant with Code of Conduct All major manufacturing units OHSAS certified * ** Incl Discontinued Operations Gunnebo Group I 19 July 2018 I page 38 Q

20 Non-Financial Targets Outcome % Use of Electricity -15% CO 2 emissions from production sites and sales -20% CO 2 emissions from production sites and sales 8% Recycling of non-hazardous waste Gunnebo Group. 19 July, Page 39 Q Business Unit Performance YTD 2018, % Safe Storage 35% of sales -4% Sales Growth 7.5% EBITA Cash Management 22% of sales -2% Sales Growth 11.1% EBITA Entrance Control 20% of sales 17% Sales Growth 14.6% EBITA Integrated Security 23% of sales -5% Sales Growth -0.9% EBITA Gunnebo Group I 19 July 2018 I page 40 Q

21 Financial Calendar 23 October, 2018 Q3, November, 2018 CMD February, 2019 Year-end Report April, 2019 AGM 2019 Gunnebo Group. 19 July, Page 41 Q Gunnebo Group. 19 July, Page 42 21