Loomis Ab · OMXSTO:LOOMIS
Loomis Ab — Merger or Acquisition (November 2008)
28 slides from Loomis Ab's merger presentation, November 2008
Slide 1: Road show presentation
Road show presentation November 2008
Slide 2: Today’s presenters
Today’s presenters Lars Blecko (CEO) CEO since 2008 Experience: CEO of Rottneros AB, Senior vice president sales & marketing Cardo Rail and Managing Director Radio Pharmaceuticals of EMA Du Pont Jarl Dahlfors (CFO) CFO since 2007 Experience: CFO Attendo Group AB, CFO EF Education, Contro
Slide 3: Agenda
Agenda Overview of Loomis Market and market drivers Organization, strategy etc Financials Summary investment case 3
Slide 4: Loomis’ history
Loomis’ history 1860 2008 4
Slide 5: Overview of Loomis
Overview of Loomis Previously Securitas Cash Handling Services Acquired Loomis, Fargo & Co, one of the largest US cash handling companies in 2001 Operates cash in transit, cash management services and technical services Headquartered in Stockholm, Sweden and has more than 20,000 employees
Slide 6: Overview of Security market
Overview of Security market 6
Slide 7: Broad offering of cash handling services
Broad offering of cash handling services 7
Slide 8: Loomis’ cash handling operations
Loomis’ cash handling operations 8
Slide 9: Favourable market trends
Favourable market trends • Banks increasingly outsource cash xx handling operations, large potential in the Outsourcing US • Retailers very interested in efficient and safe cash handling solutions • Favourable market • Fragmented market Consolidation for Loomis • Barriers to entry • Cash in circul
Slide 10: Outsourcing
Outsourcing Case study Safepoint® A franchisee with 19 restaurants in North America seeks a cash handling solution that could: Streamline and improve the security Reduce the number of people involved Guarantee that the money was deposited in the bank on time Installed Safepoint® leading to
Slide 11: Consolidation
Consolidation Market shares, US market Market shares, European market 30% 35% 65% 70% 4 main operators Others 4 main operators Others 11
Slide 12: Main competitors
Main competitors US security company with operations in more than 50 countries Sales of USD 3,219 million in 2007. Main competitor in the US Company recently spun off its home security division making it a company focused mainly on cash handling UK/Danish security company Sales of GBP 4,49
Slide 13: Growth
Growth Strong underlying drivers Cash in circulation, Western Europe (EUR bn) Cash in circulation, North America (USD bn) 13 30 12 8.3% CAGR 4.1% CAGR 25 11 10 20 9 8 15 7 6 10 2002 2003 2004 2005 2006 2007 2008 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 200
Slide 14: Potential market - estimated by Loomis
Potential market - estimated by Loomis Potential world market för cash handling SEK 170 bn N. America ~SEK 45 bn Other ~SEK 65 bn Europe ~SEK 60 bn Available market Potential market Potential market Available market SEK 15-20 bn ~SEK 25-30 bn ~SEK 35-40 bn ~SEK 20-25 bn Market share ~30% Market shar
Slide 15: Slim decentralized organization
Slim decentralized organization High degree of responsibility to countries requires: Full accountability Strong financial and risk control Streamlined HQ functions 15
Slide 16: Strategy
Strategy Shareholder value through customer value Faster - fewer float days Higher security Expand geographic network through organic growth and acquisitions USA - targets identified Eastern Europe - follow the Euro 16
Slide 17: Risk management
Risk management Loomis risk management strategy is based on two fundamental principles: No loss of life Balance between risk and profitability Loomis risk organization includes approx. 150 specialists working with risk prevention Every potential risk exposure is Evaluated Rated Preve
Slide 18: Long term Objectives
Long term Objectives EBITA-margin of at least 10%, short term target of at least 8% in 2010 Up to 8%: Price/Branch/Risk 8-10%: Price/Branch/Risk + product mix (increase in CMS proportion) Operational cash flow >85% of EBITA Global leader in Cash Handling and number one or two in each marke
Slide 19: Net sales and EBITA-margin
Net sales and EBITA-margin f +17.7% 14 000 CAGR o 10% 9% 12 000 11 474 8% 11 397 11 059 10 000 10 447 MSEK 10 082 7% 9 207 6% 8 000 8 547 8 291 8 152 5% 6 000 4% 4 000 3% 3 908 3 127 2% 2 000 2 638 1% 0 000 0% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Jan-Sep Jan-Sep 2007 2008 Sales EBITA-ma
Slide 20: Sales and EBITA margin by segment
Sales and EBITA margin by segment 12,000 10% 11,000 9% 10,000 8% 9,000 7% 8,000 7,000 6% SEK m 7,238 6,000 7,555 7,665 5,729 5% 5,390 5,000 4% 4,000 3% 3,000 2% 2,000 3,821 3,919 3,732 2,818 2,762 1% 1,000 0 0% 2005 2006 2007 Jan-Sep 2007 Jan-Sep 2008 USA Sales Europe sales Europe EBITA margin USA E
Slide 21: Q3 results
Q3 results Revenues of SEK 2,836 million Organic growth of 4% EBITA-margin of 7.2% (1.6% in Jul-Sep 2007) EPS of SEK 1.15 Two acquisitions in the US and Sweden Sales and EBITA-margin 4,000 10% 3,500 8% 3,000 2,905 2,844 2,956 2,850 6% 2,500 2,802 2,789 2,836 2,647 2,669 2,000 4% MSEK 1,500
Slide 22: Cost structure and pro forma EBITA 2007
Cost structure and pro forma EBITA 2007 100.0% 100.0% Other costs 12.9% 90.0% Costs for premises 4.5% 80.0% 9.9% Vehicle costs 70.0% 4.6% Risk costs 60.0% 50.0% 40.0% Personnel 59.9% costs 30.0% 20.0% 10.0% 2.3% 3.0% 5.3% 5.9% Depreciation 0.0% Net sales Operating costs EBITA Reversal of LCM-related
Slide 23: Capital expenditure and depreciation
Capital expenditure and depreciation 1,000 8.0% 7.0% 800 837 6.0% 737 694 702 672 5.0% 600 SEK m 613 537 4.0% 501 488 400 405 3.0% 2.0% 200 1.0% 0 0.0% 2005 2006 2007 Jan-Sep2007 Jan-Sep 2008 Capex, net Depreciation Capex as % of sales Depreciation as % of sales 23
Slide 24: Balance sheet
Balance sheet Balance sheet, Loomis September 30, 2008 (SEK m) Assets SHAREHOLDERS' EQUITY AND LIABILITIES Intangible fixed assets 2,666 Tangible fixed assets 2,674 Shareholder's equity 2,508 Financial fixed assets 382 Interest bearing long-term liabilities 69 Total fixed assets 5,840 Non-interest-b
Slide 25: Outlook
Outlook Recent turbulence on financial markets Positive effects: Increase in proportion of cash purchases, lower staff turnover and increased outsourcing as banks to focus on their core business. Negative effects: Increased risk of robbery, reduced consumption and possible increased risk of ba
Slide 26: The spin-off in brief and time table
The spin-off in brief and time table The Board of Securitas has decided, for the purpose of increased transparency, specialization and shareholder value, to spin off Loomis AB and list it as a separate company Five shares in Securitas entitles to one share in Loomis (Five A-shares give one A-sha
Slide 27: Summary investment case
Summary investment case Leading market position Underlying Geographic growth expansion drivers Global footprint / Consolidation Local potential experience Barriers to Increased entry outsourcing Strong brand 27
Slide 28: LOOMIS
28 7‘ LOOMIS Managing Cash in Society