Loomis Ab · OMXSTO:LOOMIS
Loomis Ab — Investor Day (September 2019)
29 slides from Loomis Ab's investor day presentation, Sep 5, 2019
Slide 1: Continuing to Lead the Transformation of the Cash Ecosystem
Continuing to Lead the transformation of the Cash Ecosystem Patrik Andersson President & CEO Capital Markets Update September 5, 2019 Capital Markets Update, Sept 5 2019 1
Slide 2: On track for 2021 targets with further opportunities ahead
On track for 2021 targets with further opportunities ahead Sales and margin targets within Delivering on targets reach New outsourcing opportunities More business opportunities ahead beyond CIT and CMS Managing cash and payments Introducing services on new payment platforms in society Capital Market
Slide 3: Today's Agenda
Today’s Agenda 14.00 Welcome and CEO presentation – 15.45 President & CEO, Europe and Latam - Patrik Andersson, President & CEO Georges Lopez 14.40 FX - Geir Wulsch, Regional Vice President 16.10 President & CEO, USA - Aritz Larrea Nordics 16.35 Joint USA and Europe Q&A 14.55 ATM Management - Dragan
Slide 4: Our ambition is to be #1 or #2 – Significant economies of scale
Our ambition is to be #1 or #2 – Significant economies of scale Canada – USA 2 Turkey 2 Toronto China – Argentina 3 Switzerland 1 Shanghai 23 countries Denmark 1 Slovakia 2 Hong Kong +400 branch offices Finland 1 Spain 2 Singapore 25,000 full time employees France 2 UK 2 UAE – Dubai Norway 1 1 Reven
Slide 5: Strong historical performance underpins our next phase of growth
Strong historical performance underpins our next phase of growth EBITA Rolling 12 months EBITA growth FX adjusted +175% 3 000 175% 150% 2 500 EBITA FX adjusted, SEK M 125% % improvement 2 000 100% 1 500 75% 1 000 50% 500 25% 0 0% Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 6: Global trends and industry dynamics
Global trends and industry dynamics Capital Markets Update, Sept 5 2019 6
Slide 7: Euro banknote circulation has nearly doubled in 10 years
Euro banknote circulation has nearly doubled in 10 years… 1 400 16% 1 200 14% 5.4% Annual growth rate 12% 1 000 10% 800 8% 22.4 billion banknotes in 600 circulation 6% 400 4% € 1,229 Bn total value of 200 2% 0 0% banknotes in circulation 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Annual
Slide 8: …and USD in circulation continues to increase
…and USD in circulation continues to increase USD Bn in circulation Growth YoY, % 1 800 55% 45% 1 500 35% 1 200 25% 900 15% 600 5% 300 (5%) (15%) 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Growth YoY USD bn Source: Federal reserve Capit
Slide 9: Cash is an important payment method…
Cash is an important payment method… Q: How important are cash services for your institution? Very 29% important Important 49% 78% rate cash services as (very) important Neutral 21% Unimportant 5% Very 0% unimportant 0% 10% 20% 30% 40% 50% 60% Source: ECB. Cash and payment study 2019 Capital Markets
Slide 10: Total volume increases even if cash market share declines…
Total volume increases even if cash market share declines… Cryptocurrencies Mobile payment Prepaid card Contactless payments Direct payment Less cash as Direct payment % of sales Loyalty cards Population growth Loyalty cards Economic growth Credit cards More transactions / person Credit cards Debit
Slide 11: …with further outsourcing to cash management companies…
…with further outsourcing to cash management companies… Total outsourcing, % 80 70 60 52.9% 55.0% Share of banks/CITs 49.3% 52.4% 50 46.9% 40 30 Share of National Central Banks 20 47.1% 45.0% 50.7% 47.6% 53.1% 10 0 2014 2015 2016 2017 2018 NCBs Banks/CIT-companies Source: ECB. Cash and payment study
Slide 12: …continuing to drive growth in the global cash handling market
…continuing to drive growth in the global cash handling market CAGR USD Bn Total 2017-2022 24.5 25 Favourable drivers: 4.4% 2.2 Total 19.3 20 9.0% ➔ Insulation from Total 17.6 1.7 macroeconomics risks Total 9.4 1.6 15.2 ➔ New waves of outsourcing 15 (0.2%) 1.2 6.1 4.3 ➔ More advanced services – 2.6
Slide 13: Loomis is #2 on a global level
Loomis is #2 on a global level Global Security Services Revenue Global Cash-in-Transit (CIT) & Related Global Cash-in-Transit Market Share by Type* Services Revenue by Region* (pro forma 2018) Eastern Africa/ Europe Brinks Alarms/monitoring Mideast 3% Significant 18% 24% proportion of 9% market is s
Slide 14: Market and Loomis are less affected by unfavourable macroeconomic events
Market and Loomis are less affected by unfavourable macroeconomic events Revenue (SEK bn) EBITA (SEK bn) Financial crisis Financial crisis 19,2 16,8 17,2 16,1 2,2 2,1 13,5 1,9 12 11,3 11 11 11,4 11,4 1,7 10,6 1,4 1,1 1 0,9 0,9 0,8 0,7 0,6 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2
Slide 15: Delivering on targets
Delivering on targets Capital Markets Update, Sept 5 2019 15
Slide 16: Targets for the strategy period 2018-2021…
Targets for the strategy period 2018-2021… Targets Key Priorities ➔ Accelerate CMS & SafePoint growth Accelerate Revenue: SEK 24 bn in 2021 ➔ Accelerate LI growth Growth 50/50 split between organic/acquisitions ➔ Introduce new services ➔ Strong focus on M&A ➔ Launch new pricing models Increase ➔ Reo
Slide 17: …and we are on track to meet them
…and we are on track to meet them MSEK Target Target CAGR 24 000 12-14% +9% CAGR +8% 20 084 +2 ppt 19 168 16 800 17 228 12.1% 16 097 +2 ppt 11.9% 11.5% 13 510 11.2% 10.6% 10.1% 2014 2015 2016 2017 2018 2019 R12 2020 2021 2014 2015 2016 2017 2018 2019 R12 2020 2021 Revenue growth expected to continue
Slide 18: M&A is in line with targets with further opportunities ahead
M&A is in line with targets with further opportunities ahead Target ➔ Revenue of SEK 3.5 Bn signed 3,500 Strong M&A ➔ Entering the important German pipeline of market SEK 10 Bn ➔ Strengthened position in Chile and France ➔ Investment in Sonect ➔ Acquisition of LVS Priorities: ➔ Core in existing mark
Slide 19: We are also delivering on sustainability targets
We are also delivering on sustainability targets Be a fair and equal 1. activities opportunity employer ➔ Management attention Key ➔ Handle risk Aim for zero workplace ➔ Training and education 2. injuries ➔ Driver behaviour Included as external 3. Reduce carbon emissions activities targets in Loomis
Slide 20: More business opportunities ahead
More business opportunities ahead Capital Markets Update, Sept 5 2019 20
Slide 21: 3rd and 4th wave of outsourcing supporting higher margins
3rd and 4th wave of outsourcing supporting higher margins New payment FX solutions ATM systems ➔ Physical FX to ➔ CIT/CMS but also ➔ Support retailers e.g. retailers and forecasting and to consolidate all banks 1st/2nd line payment streams ➔ Outsourced/ maintenance ➔ PSD2 opens up Market maturity Ne
Slide 22: Strategy developed for a successful FX business
Strategy developed for a successful FX business – A SEK 10 Bn market in Europe #1 or #2 within FX in selected European Key activities Market position countries ➔ Build stand alone organisation including compliance ➔ Take a local wholesale position Target: SEK 1 Bn in revenue in 2-3 years Financial M
Slide 23: ATM – 4th wave of outsourcing from banks – strong growth of IAD's
ATM – 4th wave of outsourcing from banks – strong growth of IAD´s - A SEK 10 Bn revenue opportunity in Europe Full outsourcing: Through contract (KPIs) or acquisition White labelling: Providing service incl. unbranded hardware. Banks decide branding Market maturity/Margin Full outsourcing Full manag
Slide 24: Introducing services on new payment platforms
Introducing services on new payment platforms Capital Markets Update, Sept 5 2019 24
Slide 25: New revenue model taking advantage of the Cash Eco-system
New revenue model taking advantage of the Cash Eco-system EARN SAVE Retailer as Virtual ATM onboarded by LOOMIS Pays/TRX EARN Bank or bank’s Customers Capital Markets Update, Sept 5 2019 25
Slide 26: Sonect – Joint launch with Loomis in Switzerland
Sonect – Joint launch with Loomis in Switzerland Highlights ➔ European licence – PSD2 compliant within SEPA ➔ New app launched ➔ First SONECT sales made by Loomis CH ➔ Ongoing joint activities in several EU markets ➔ 2,200 virtual ATMs up and running – largest ATM network in Switzerland ➔ Attractive
Slide 27: New Payment Systems – Possibility for Loomis to take a position
New Payment Systems – Possibility for Loomis to take a position in the retail payment landscape ➔ Loomis has access to a large retail base Retail ➔ Through partnerships and acquisitions take a new position Retailers Bank ➔ Manage all types of payments ➔ Saves time and money for the retailers Consume
Slide 28: The Loomis model – A strategic tool
The Loomis model – A strategic tool Loomis Model 2.0 ➔ Updated Loomis model based on strategy ➔ Key for company culture ➔ Key for integration of acquired companies ➔ Key for best practice sharing ➔ Key for driving efficiency Capital Markets Update, Sept 5 2019 28
Slide 29: On track for 2021 targets with further opportunities ahead
On track for 2021 targets with further opportunities ahead Sales and margin targets within Delivering on targets reach New outsourcing opportunities More business opportunities ahead beyond CIT and CMS Managing cash and payments Introducing services on new payment platforms in society Capital Market