The specialist in cash handling

Transcription

1 The specialist in cash handling Growing revenues but maintaining our focus on earnings and margins Capital Markets Day London September 25 th 2014

2 Program Presentations, including: Growing revenues but maintaining our focus on earnings and margins Jarl Dahlfors, President & CEO and Anders Haker, CFO Break CMS and SafePoint driving growth in the US market Lars Blecko, VP Regional President USA Regional growth opportunities: - Growing through International Services Urs Röösli, Regional President Loomis International Services - Growing revenues and margins through acquisitions VIA MAT CIT/CMS in Switzerland Georges López Periago, Regional President Southern Europe - Growing beyond CIT and CMS in the Nordic Region Patrik Högberg, Regional President Nordics - Growth opportunities in Turkey Kenneth Högman, EVP, Regional President Northern Europe Cocktails CEO Summary Jarl Dahlfors Anders Haker Lars Blecko Georges López Periago Patrik Högberg Kenneth Högman Urs Röösli

3 Cautionary Statement This presentation contains, or may be deemed to contain, forward-looking statements. These statements relate to future events or our future financial performance, including, but not limited to, strategic plans, potential growth, planned operational changes, expected capital expenditures and future cash sources and requirements, that involve known and unknown risks, uncertainties and other factors that may cause Loomis or its businesses actual results of operations, levels of activity, performance or achievements to be materially different from those expressed or implied by any forward-looking statements. In some cases, such forward-looking statements can be identified by terminology such as may, will, could, would, should, expect, plan, anticipate, intend, believe, estimate, predict, potential, or continue, or the negative of those terms or other comparable terminology. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Future results may vary from the results expressed in, or implied by, the forward-looking statements contained in this presentation, possibly to a material degree. All forwardlooking statements made in this presentation are based on information presently available to management and Loomis assumes no obligation to update any forward-looking statements, unless obligated to do so under applicable law or regulation.

4 Today s agenda Delivering on our margin objectives Strong platform for future development Entering into a growth phase with increased performance New financial targets Taking advantage of regional opportunities Case studies to support new targets 4

5 Increasing our growth profile - Continued margin improvements Quality Profit Growth From 90% focus on profit margin....to a more balanced focus between profit margin, revenue growth and capital allocation Loomis model delivers a healthy growth 5 5

6 A history of continuous improvements and reaching objectives

7 Our strict focus on profitability has paid off 12% 10% 8% 8,0% 8,3% 9,0% 9,7% 9,8% Target 2014 Target % 6,6% 7,0% 4% 2% 0% R12 Target remains, 10% latest 2014 (excl VIA MAT) 7

8 with EPS growth of 11% CAGR 12 EPS, SEK, diluted ,60 9, ,80 6,62 6,57 6,79 Equivalent to a CAGR of 11% DPS, SEK ,50 3,75 4,50 5,00 Equivalent to a CAGR of 17% 2 2,25 2,

9 Earnings focus has led to modest growth Revenue, SEK m Ebita margin, % 14,0% 12,0% 10,0% 8,0% 6,0% 4,0% 2,0% * Revenue Ebita margin, % 0,0% 9

10 Is cash usage important?

11 Future cash growth is expected to be close to flat 130 Real GDP Cash use 1 % CAGR* *) Source:MPD

12 No correlation between cash usage and profitability High Cash usage in % of total no of transactions Low Low Operating margin High 12

13 Outsourcing Outsourcing drives profitability High Low Low Profitabilty High 13

14 Growth rate Growth rate Strong global outsourcing trend Global outsourcing cycle Banking outsourcing IT Call centres BPO Source: Professor Arie Y. Lewin, Duke University ORN Source: Accenture 14

15 Long-term opportunities in emerging markets Cash Handling Market Growth Asia Pacific Middle East & Africa Latin/Central America Europe North America 0,0% 1,0% 2,0% 3,0% 4,0% 5,0% 6,0% 7,0% 8,0% 9,0% 10,0% Source: Freedonia 15

16 Launching new Financial targets

17 Launching new financial targets Revenue New target SEK 17 bn by 2017 Previous target N/A Ebita margin 10-12% 10% at the latest 2014 Debt gearing Max 3.0 (net debt/ebitda) Max 2.5 (net debt/ebitda) Dividend 40-60% of net earnings 40-60% of net earnings 17

18 Revenue Target: Reaching SEK 17 bn by 2017

19 Targeting SEK 17 bn in revenues 2017 SEK bn Growth SEK 3 bn CAGR 7% PF Combined organic and acquired growth Organically: Underlying volume (+) Outsourcing (+++) Broadening service portfolio (+++) Market share (++) Pricing(++) 19

20 Accretive acquisitions have been made Acquired revenue, SEK m Ebita margin, % 12,0% ,0% ,0% 900 6,0% 600 4,0% 300 2,0% * 0,0% Revenue - acquisitions Ebita margin, % * 2014 R12 Ebita margin 20

21 We always have a strategy to be #1 or #2 20 countries Austria 1 Slovenia 2 ~400 branch offices employees Revenue SEK 13 bn Czech Republic 2 Denmark 2 Spain 2 Sweden 1 USA 1 Finland 2 France 2 Switzerland 1 Turkey 3 Brazil - Germany - Norway 1 UK 2 Argentina 5 Portugal 3 Dubai - Slovakia 1 Hongkong - 21

22 Margin Target: 10-12%

23 Ebita margin will continue to increase - potentially impacted by M&A 14% 12% 10% EBITA 10%-12% 8% 6% 4% 2% 0% R Many branches with unfinished improvement programs Continued mix shift in line of business (proportionally less CIT) 23

24 We know how to handle cash efficiently %, margin ,6 3,6 1, Efficiency Cost of risk Overhead Depreciation on capex 0,1 1,5 9, Loomis model with a few focus areas Best practice sharing Bench marking (monthly KPI ranking) Measure, Monitor, Manage 24

25 Increasing no. of performing branches 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 30% 28% 27% 26% 25% 22% 17% 70% 72% 73% 74% 75% 78% 83% JUNE - YEAR TO DATE Performing Non-performing Once the Loomis model is fully implemented ~10% is underperforming Very stable / sustainable change 25

26 Gearing Target: Net debt/ebita max 3.0

27 Increased gearing supports growth plans 3,50 Net Debt / EBITDA 3,00 Revised level 2,50 2,00 1,50 1,00 0,50 0,00 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12 Q3-12 Q4-12 Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Net Debt / EBITDA Acquisitions and dividends have temporarily increased gearing 27

28 Stable capital expenditure 9% Capex/Total Revenue 8% 7% 6% 5% 4% 3% 2% 1% 0% Main components Vehicle replacements and security equipment SafePoint expansion Upgrades of branch facilities 28

29 Modern branches in US support growth projects Old CMS facility, Houston Branch New CMS facility, Houston Branch Increased CMS revenue is a primary growth opportunity in US and requires secure and cost efficient processes 29

30 Dividend Target: 40-60% of net earnings

31 Maintaining dividend target of 40-60% of net earnings history shows stability Accumulated EBITA Operating cash flow before cap ex Capital expenditures Capex to depreciation ratio 107% 103% 127% 104% 95% 107% Operating cash flow Operating cash flow as ratio of EBITA 94% 106% 77% 84% 87% 89% Free cash flow Dividends Dividends as ratio of net earnings 39% 39% 52% 53% 52% 48% Free cash flow current rolling 12 months was SEK 739 m 31

32 Growing revenues but maintaining focus on earnings and margins Strong platform for future developments History of continuous improvements and reaching our objectives Increased focus on growth Continued activities to build revenue and improve margins even further Focus on shareholder returns New financial targets delivering shareholder value 32

33 Launching new financial targets Revenue Ebita Margin Debt gearing New target SEK 17 bn by % Max 3.0 (net debt/ebitda) Priorities CMS in USA SafePoint in USA International Services Continued development in value-added services M&A Fewer underperforming branches Business mix less CIT more CMS and LIS Benchmarking/Best Practice through the Loomis Model Increased gearing supports growth plans Stable capital expenditures predicted Dividend 40-60% of net earnings History shows stability Committment to delivering shareholder value 33