Loomis Ab · OMXSTO:LOOMIS
Loomis Ab — Investor Day (November 2024)
75 slides from Loomis Ab's investor day presentation, Nov 13, 2024
Slide 1: Loomis Capital Markets Day 2024
Loomis Capital Markets Day 2024 November 13, 2024
Slide 2: Disclaimer
Disclaimer This presentation and the information contained herein have been By their nature, forward-looking statements involve risks and prepared by Loomis AB (“Loomis”) solely for information purposes. uncertainties because they relate to events and depend on circumstances that may or may not occu
Slide 3: Today's presenters
Today’s presenters Aritz Larrea, Georges Lopez, Björn Züger, Johan Wilsby, President and CEO President Loomis Europe President Loomis US Chief Financial Officer and Latin America
Slide 4: Agenda
Agenda Aritz Larrea, The next phase of sustainable growth President and CEO Georges Lopez, President Loomis Europe and Latin America The path to profitable growth Break Björn Züger, President Loomis US Capturing market momentum Johan Wilsby, Chief Financial Officer A resilient and cash generative mo
Slide 5: The next phase of sustainable growth
The next phase of sustainable growth Aritz Larrea President and CEO
Slide 6: Committed to grow our business
Committed to grow our business 1 Resilient and proven track record 2 Leveraging market momentum and enhancing scalability 3 Value-creating targets deliver competitive returns
Slide 7: We ensure efficient and safe payment flows
We ensure efficient and safe payment flows Central Banks Commercial & Retailers Consumers retail banks Providing critical Offering specialized Saving time by Facilitating all payment infrastructure for expertise and cash streamlining payment types and promoting physical currencies management outsour
Slide 8: A complete offer to meet customer needs
A complete offer to International valuables meet customer needs logistics (VIT/VIS) 5% FX 2% Cash Management Services (CMS) 18% ATMs 21% Loomis Pay Automated Cash in Transit <1% (CIT) solutions Core Adjacent Digital 36% 59% 41% <1% 18% * Percentages represent share of revenue, rolling 12 months endi
Slide 9: A global business with a strong local presence
A global business with a strong local presence Each market is unique Our decentralized business model ensures operations are well-positioned for local conditions Countries with cash handling operations International Hubs (VIT/VIS) CIMA offices Loomis Pay 400+ ~25k 27 ~ 30b branches employees globall
Slide 10: Steadily increasing revenues and recovering margin
Steadily increasing revenues and recovering margin Revenue (SEKb) and Operating Margin (EBITA%) 12.4% 12.1% 11.2% 11.5% 11.4% 10.8% 10.7% 10.6% 10.1% 9.9% 9.4% 29.9 28.7 21.0 25.3 19.2 18.8 19.7 16.1 16.8 17.2 13,5 COVID COVID 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 R12
Slide 11: Consistently delivering shareholder returns
Consistently delivering shareholder returns Share Repurchase (SEKm) Dividend (SEKm) 1,680 1,228 800 1,053 600 200 801 750 677 602 350 527 414 376 853 880 451 628 451 COVID COVID 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Slide 12: Delivering on strategic priorities 2022-2024
Delivering on strategic priorities 2022-2024
Slide 13: Our 2022 to 2024 targets
Our 2022 to 2024 targets Target 2022-2024 Accelerate Revenue Growth Compounded annual growth rate, 5% - 8% currency adjusted, 2022-2024 Increase Operating margin (EBITA%) 12% - 14% Margins at the end of the strategic period Reduce Reduction of CO2e Carbon Impact for scope 1 & 2 combined, 15% 2024 co
Slide 14: We have delivered on our commitments
We have delivered on our commitments STRATEGIC PRIORITIES 2022-2024 Accelerating Combining Strong focus on Industry leading Developing the core business physical and recurring revenue sustainability Loomis’ culture digital capabilities initiatives
Slide 15: Accelerating the core
Accelerating 20 000 the core 18 000 16 000 14 000 Revenue (SEKm) 12 000 10 000 ~40% Key drivers: organic growth, 8 000 Growth M&A and efficiency strategy 6 000 4 000 Steady strong organic growth in 2 000 CIT and CMS 0 Integrated strategic acquisitions 2021 2024 R12 Focus on operational excelle
Slide 16: Combining physical and digital capabilities
Combining physical Acquisitions with cutting-edge technologies and digital capabilities strengthening our global capabilities Launched Loomis Pay in Spain - a cash intensive country Innovative solutions at the forefront Provides us capability to build Strengthened our position by selectively
Slide 17: Strong focus on recurring revenue
Strong focus on ATM and automated recurring revenue solutions now represent 39% of the total revenue 5 000 For the rolling 12 months ending Sep. 2024 4 500 4 000 3 500 ATM Revenue (SEKm) 3 000 2 500 45% growth 2 000 during the previous period ~70% 1 500 Growth 1 000 500 Automated Solutions 0 2021 20
Slide 18: Industry leading sustainability initiatives
Industry leading sustainability initiatives Environment Social Governance Reduced emissions while Proactive health and safety Strengthened key functions growing the business measures within risk, compliance, and Proportion of renewable Emphasis on training and financial crime prevention en
Slide 19: Set to deliver on our 2024 targets
Set to deliver on our 2024 targets Target Outcome 2022-2024 2022-2024 R12* Accelerate Revenue Growth Compounded annual growth rate, 5% - 8% 11.9% currency adjusted, 2022-2024 Increase Operating margin (EBITA%) 12% - 14% 11.4% Margins at the end of the strategic period Reduce Reduction of CO2e Carbon
Slide 20: Looking ahead
Looking ahead Strategic priorities 2025-2027
Slide 21: Strategy: strategic priorities 2025-2027
Our upcoming period Strategy STRATEGIC PRIORITIES 2025-2027 Grow in Generate growth and Drive operational Lead sustainability in established product expansion excellence and our industry markets through M&A scalability
Slide 22: Grow in established markets
Grow in established markets Current Central banks, large We will establish a customers banks and retailers balanced approach to growth both through: Regional banks, other organized retailers, medium sized retailers' chains / 1. Maximizing growth franchisees and high value independent retailers in es
Slide 23: Maximizing growth in established segments
Maximizing growth in established segments Capture cash management outsourcing opportunities. Key customer insights Optimized cash inventory to mitigate risks ~ 40% of the in-store payments are in cash Increase customer value by upselling CIMA’s product offering. Tight labor market and increasi
Slide 24: Expanding into new customer segments
Expanding into new customer segments Relieving SMEs from cash handling & transportation. Key SME insights In-store cash is used to pay smaller transactions Banks are not prioritizing SMEs, so their deposit Adapt existing management has worsened automation solutions to the size of the new 87% o
Slide 25: Generate growth and product expansion through M&A
Generate growth and product expansion through M&A … that will enable us to create growth Trends defining a dynamic landscape … Consolidate in present markets Industry consolidation to enhance operational synergies. Enter emerging markets in LatAm, where +70% of payments are cash. Customer digitaliza
Slide 26: Tailored approach to strengthen product and service capabilities
Tailored approach to strengthen our product and service capabilities across our business lines Core Adjacent Digital Automation providers to Software providers for Local Point-of-sale streamline processes. automated solutions and (POS) and software Businesses which service for ATMs. solutions. broad
Slide 27: Drive operational excellence and scalability
Drive operational excellence and scalability Having the right infrastructure with most efficient use of our resources is key to Shared platforms to build-on sustainable profitable growth. We are adapting our operations to ensure we consistently increase the value of the Innovation and technology ser
Slide 28: Leading sustainability in our industry
Leading sustainability in our industry ENVIRONMENTAL SOCIAL GOVERNANCE SUSTAINABILITY RESPONSIBILITY AND COMPLIANCE Emission reduction Attract and retain talent Responsible procurement Resource efficiency Health and safety Reliable partner
Slide 29: 2025-2027 targets
2025-2027 targets Commitment to Growth, Profitability and Sustainability Target 2025-2027 Continued Revenue Growth Compounded annual growth rate, 5% - 7% currency adjusted Increase Operating margin (EBITA%) 12% - 14% Profitability during the entire strategic period Reduce Reduction of CO2e Carbon Im
Slide 30: Q&A
Q&A
Slide 31: The path to profitable growth
The path to profitable growth Georges Lopez President Europe and Latin America
Slide 32: The path to profitable growth
The path to profitable growth 1 Core business recovery, optimization and growth 2 Increasing our adjacent businesses - organically and via M&A 3 Accelerating SME market expansion
Slide 33: This is Loomis Europe and Latin America in figures
Loomis EUL This is Loomis Europe and Latin America in figures 242 branches 23 countries 14 SEKb in revenue International Hubs (VIT/VIS) Estimated market position, countries with cash handling operations 15k+ CIMA offices employees Loomis Pay #1 #2 #3
Slide 34: Loomis EUL – business is back
Loomis EUL – business is back Revenue and margin development Revenue per business line (SEKm, EBITA %) (% of revenue*) Revenue Operating margin 15 000 15% CIT CMS International Automated Solutions ATM FX 12 000 12% 4% 9 000 9% 20% 35% 6 000 6% 13% 3 000 3% 7% 21% 0 0% 2019 2020 2021 2022 2023 2024 C
Slide 35: Industry trends drive our business forward
Industry trends drive our business forward Core slide… Legislative initiatives to safeguard the role of cash 42% of in-store payments are made with cash, most of them are low value in store transactions We are committed to cash and to Card payments accounted for 56% of total number of non-cash
Slide 36: Growing our core business
Capturing outsourcing of cash management services Expanding the International business offering Growing our core business Enabling cash availability
Slide 37: Strong growth in adjacent business lines
Strong growth in 3 000 adjacent business lines 2 500 Increasing digital and automation capabilities 2 000 Revenue (SEKm) Cash automation R&D capabilities 1 500 ~80% A broader range of solutions Combined Growth 1 000 E-money license in EU Acquiring and payment capabilities 500 0 Crucial kno
Slide 38: Alternative energy sources support our sustainability commitments
Alternative energy sources support our sustainability commitments Emissions reduction 1 Solar Panels In 22 branches by the end of 2025. Cost effective 2 Switching to HVO - biodiesel Pilot for armored vehicles in France. Technology advanced 3 Employee Safety Strong focus on injury reduction and ergon
Slide 39: Implementing the strategic priorities 2025-2027
Implementing the strategic priorities 2025-2027 Loomis Europe & Latin America
Slide 40: Path to profitable growth
Path to profitable growth With a sustainable approach along our journey Customer centric Value creation Knowing and growing our customer base Growth and improved operating margin Operational efficiency Optimized footprint and scalability EUL New customer segments Adapting our solutions to SME needs
Slide 41: Optimizing EUL operations
Optimizing EUL operations Organizational Standards & Geographical Sales Capabilities Scalability Footprint Strategy Adapting our internal Enhancing scalability of our Streamlining our footprint to Transforming our sales capabilities and processes to improve the focus on the countries that framework
Slide 42: Expanding our addressable market within Automated Solutions
Expanding our addressable market within Automated Solutions 90% market 140000 growth 120000 Front-office 100000 in 2027 vs 2022 80000 ~80% Units market growth 60000 69% market 40000 growth 20000 Back-office smart safes & 0 2022 2027 recyclers in 2027 vs 2022 Back Office - Acceptors POS - Recyclers F
Slide 43: Outsourcing of services surrounding existing ATM fleets has large potential
Outsourcing of services surrounding existing ATM 05 08 fleets has a large potential ATM management services ATMaaS / outsourcing (FLM/SLM) (incl. cash funding and hardware) 01 CIT and CMS 04 services Property / facility management 07 Acquiring & reconciliation 06 02 03 Central IT (incl. Cash forecas
Slide 44: Capturing the outsourcing of ATMs and managed services
Capturing the outsourcing of ATMs and managed services Loomis has 14% market share. Loomis EUR/LATAM markets number of ATMs* We will keep growing organically and inorganically. IAD** IAD** 50,000 50,000 Bank Bank 300,000 300,000 * Based on a combination of internal and external sources. ** Independe
Slide 45: Accelerating SME expansion in cash intensive territories
Accelerating SME expansion in cash intensive territories EU SME market size is ~23 50% of EU GDP. million SMEs 1 Leveraging on Loomis cash related capabilities to meet increased demand from SMEs. We estimate to address 2 Adapting our core and adjacent offering for SMEs ~1 million SMEs with our solut
Slide 46: The path to profitable growth
The path to profitable growth Expand revenues and margin organically and via M&A Capture outsourcing opportunities from banks and retailers Launch new modular offers for SME segment
Slide 47: Capturing market momentum
Capturing market momentum Björn Züger President Loomis US
Slide 48: Capturing market momentum
Capturing market momentum 1 Recurring revenue growth 2 Expanding ATM and automated solutions market share 3 Capturing new market segments
Slide 49: This is Loomis US in figures
This is Loomis US Loomis US in figures 178 branches 4 countries 16 SEKb in revenue International Hubs (VIT/VIS) CIMA offices Offering cash handling and 10k+ CIT services in all US states employees
Slide 50: Loomis US – record revenues
Loomis US – record revenues Revenue and margin development Revenue per business line (SEKm, EBITA %) (% of revenue*) Revenue Operating margin CIT CMS International ATM Automated Solutions 16 000 16% 12 000 12% 23% 37% 8 000 8% 22% 4 000 4% 3% 15% 0 0% 2019 2020 2021 2022 2023 2024 COVID R12* Core Ad
Slide 51: Industry trends drive our business forward
Industry trends drive our business forward Core slide… Right to cash movements is trending up The consistent Cash discounting, credit surcharges, and privacy number of cash concerns uphold cash usage payments and sustained elevated Labor market, security concerns and higher interest cash hold
Slide 52: Strong increase in recurring revenues
Strong increase in recurring revenues Automated Solutions 3 500 3 000 2 500 95% growth Revenue (SEKm) 2 000 1 500 1 000 ATM 500 0 Automated Solutions ATM 44% growth 2021 2024 R12 CAGR 25% Automated solutions | 13% ATM
Slide 53: Operational efficiency has enabled core business growth
Operational efficiency has enabled core business growth Efficiency programs in CIT have led to time gains of 9% and in CMS to 8% increased processing speed Captured new customer volume and increased service quality by 42% with reduced operational staffing (-7%) Continued investment into facili
Slide 54: Modernizing our fleet supports our sustainability commitments
Modernizing our fleet supports our sustainability commitments Emissions reduction 1 Electric vehicles By 2025 we will operate 170 EVs Cost effective 2 Switching to HVO - biodiesel where available and supported by local states Labor efficient 3 Safer and more efficient The ongoing fleet shift from he
Slide 55: Our commitment to be 100% electric in NYC
Our commitment to be 100% electric in NYC has removed idling penalties
Slide 56: Implementing the strategic priorities 2025-2027
Implementing the strategic priorities 2025-2027 Loomis US
Slide 57: Deliver sustainable profitable growth within the core business
Deliver sustainable Gain market share profitable growth with the highest service quality and M&A within the core business Capture customer volume with optimal staffing Invest in automation technologies to streamline processes Large proportion of cash 27% vaults remain to be outsourced 45% Cash vault
Slide 58: Addressing the growing automated solutions market
Addressing the growing automated solutions We are the US leading partner market for automated solutions ~25% market share for Smart Safes We will increase market penetration in a growing market by developing new solutions to address new market Loomis will champion it during its expansion. demands: T
Slide 59: Capturing opportunities in the ATM business
Capturing opportunities in the ATM business 1.8b USD market Managed services 40% surrounding ATMs 60% ~520,000 ATMs in the US market ATM owned by Merchant / IAD / other ATM owned by financial institutions Solid market with upwards tendency Acquire first-line and Offer a 360-degree second-line mainte
Slide 60: A unique offer of digital and cash payment services for SMEs
A unique offer of digital and cash payment services for SMEs We estimate to address 1.8 million SMEs with our solutions Combine digital and cash payments with our traditional services to support SME retailers Complement product offering with CIMA to accelerate US POS installed will grow CIT & CM
Slide 61: Capturing market momentum
Capturing market momentum We will deliver organic growth for core and automated solutions by continued market momentum capturing through our high-quality service. We will add core market share through M&A Increase customer value in Automated Solutions with our 360-degree offering through M&A
Slide 62: A resilient and cash generative model
A resilient and cash generative model Johan Wilsby CFO
Slide 63: A resilient and cash generative model
A resilient and cash generative model 1 Proven track record of delivering strong financials 2 Well-positioned for future value-creation 3 Capital allocation priorities drive shareholder returns
Slide 64: Driving balanced growth
Driving balanced growth Robust revenues, strong cash flow, and strategic expansion Co2e per driven km Solid FX adjusted revenue EBITA CAGR of 6% reduced by 23% CAGR of 7% despite COVID years Strong Cash flow Leverage <2 and BBB Active in M&A space; conversion: investment grade in 2024 9 acquisitions
Slide 65: Compelling value creation post COVID
Compelling value creation post COVID … generating Total Platform Growth Our Value Creation Drivers… Shareholder Returns • Steady revenue base with high service quality Revenue >1.5x • Growth through recurring revenues • Attractive geographic footprint in stable, growth markets ~3.8 SEKb Cash Returne
Slide 66: Long term opportunities for Loomis
We are in attractive markets with opportunities to grow in new segments and product areas Outlook Long term opportunities Decentralised model in place and looking to drive more scalability ahead for Loomis ESG leadership and operational excellence Stable cash flow generation and solid capital alloca
Slide 67: Our value creation framework
Our value creation framework Organic growth step change Mid to high single digit Total revenue growth Increasing M&A acceleration and CAGR shareholder returns portfolio high-grading Consistent margin Attractive Scalability improvement total return Around 90% Cash conversion cash conversion
Slide 68: Our value creation drivers for 2025-2027
Outlook Our value creation drivers for 2025-2027 Margin improvement driven by Digital & SME M&A Operational excellence Scalability to improve margins in both regions Active M&A agenda to provide accretive margins Positive impact from expansion within SME/Digital
Slide 69: Targets 2025-2027 and guiding elements
Targets 2025-2027 and guiding elements Guiding metrics Target 2025-2027 Strong Revenue <5 tCO2e Growth Compounded annual growth rate, 5 – 7% for scope 1 and 2 currency adjusted per revenue SEK m Increase Operating margin (EBITA%) 12 – 14% <5% Profitability during the entire strategic period CAPEX as
Slide 70: A holistic approach to balanced capital allocation
A holistic approach to balanced capital allocation Investments in M&A is part of Shareholder sustainable growth our growth story distribution Covering both Solid track record Dividend policy of 40- maintenance and growth Active pipeline 60% of net income investments, with our Complemented
Slide 71: A resilient and cash generative model
A resilient and Loomis has a proven track record of strong growth, cash flow, and strategic expansion, cash generative driving competitive returns model Our value creation framework supports our key drivers and investments into balanced execution Shareholder distribution is a key focus in our capita
Slide 72: Q&A
Q&A Aritz Larrea, Georges Lopez, Björn Züger, Johan Wilsby, President and CEO President Loomis Europe President Loomis US Chief Financial Officer and Latin America
Slide 73: The next phase of sustainable growth
The next phase of sustainable growth Aritz Larrea President and CEO
Slide 74: Committed to grow our business
Committed to grow our business 1 Resilient and proven track record 2 Leveraging market momentum and enhancing scalability 3 Value-creating targets deliver competitive returns
Slide 75: Loomis
LOOMIS