Loomis Ab · OMXSTO:LOOMIS
Loomis Ab — Investor Day (November 2010)
30 slides from Loomis Ab's investor day presentation, Nov 17, 2010
Slide 1: Strategy and Goals
Strategy and Goals Lars Blecko, CEO Capital Market Day Stockholm, November 17, 2010
Slide 2: Agenda
Agenda • Our business • Our market • Our strategy • Our goals • Summary 2
Slide 3: Our Business
Managing Cash in Society OUR BUSINESS 3
Slide 4: Our Vision
Our Vision Our long term vision is to be: “The undisputed Specialist at Managing Cash in Society” Loomis offers complete logistics for handling of cash through innovative and secure cash distribution solutions for the bank and retail sectors 4
Slide 5: Our business
Our business • Cash In Transit (CIT) – Loomis utilizes a fleet of more than 5,900 secure vehicles that transport cash to and from retailers and other commercial enterprises, banks, and ATMs. In this logistics system, Loomis’ task is to ensure that the right amount of cash is in the right place at th
Slide 6: Our business
Our business Loomis Group • Headquarters in Stockholm, Sweden Loomis US Loomis Europe • 160 branches • 210 branches • 7,100 employees • 11,100 employees • Sales 2009: • Sales 2009: CIT MSEK 3,497 CIT MSEK 4,993 CMS MSEK 852 CMS MSEK 2,456 Other MSEK 23 Other MSEK 169 6
Slide 7: Our role in society
Our role in society ATMs Central banks Banks General public Businesses 7
Slide 8: Our Business – the value chain
Our Business – the value chain • How we charge – Cash In Transit • Price/number of stops – Cash Management Services • Price/bag (amount, notes and coins) • Distinct single markets – Limited cross border business – Few international clients – Best knowledge sharing – Brand leverage • Value Drivers –
Slide 9: Essential points in a typical Loomis contract
Essential points in a typical Loomis contract • Length of contract 0–5 years – major contract 3–5 years • Price and price increase – index or annual re-negotiation • Conditions – Capped liability in all contracts • Operations – Time windows commitments – Service Level Agreement 9
Slide 10: Our Market
Global experiences and closeness to clients OUR MARKET 10
Slide 11: Market Trends
Market Trends Cash in circulation, Western Europe (EUR bn) Cash in circulation, USA (USD bn) 14 30 CAGR 7,5 % 12 CAGR 3,8 % 25 10 20 8 15 6 10 2002 2003 2004 2005 2006 2007 2008 2009 2010 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 ATMs, Europe ATMs, USA CAGR 4,3% 500,000 500,000 CAGR 4,3
Slide 12: Market trends
Market trends Current status • Banks increasingly outsource Slow cash handling operations. Outsourcing • Retailers seeking efficient and High interest safe cash handling solutions. Favorable • Few Global companies, many Signs of activity Consolidation local. Possibility to acquire. market trends for
Slide 13: Market position by country
Market position by country Country Market Position France 1 Sweden 1 USA 2 ”Reaching for Spain 2 no 1 or 2 in UK 2 Austria 2 every market Finland Norway 2 2 we are in or Denmark 2 aiming for” Slovenia 2 Switzerland 2 Czech Republic 2 Portugal 3 Slovakia 3 13
Slide 14: Potential for comprehensive solutions in present Loomis markets
Potential for comprehensive solutions in present Loomis markets Market maturity differences offers additional growth potential Level of maturity Mostly outsourced with mix of bank and retail, higher level of CMS Partly outsourced with focus on banks Finland Banks still controlling most of cash
Slide 15: The Competition
The Competition Market shares, US market Market shares, Europe Total: 20 bn.SEK (est.) Loomis markets Total: 25 bn.SEK (est.) 25% 30% 30% 35% 45% 35% Loomis Loomis Brinks, Garda, Dunbar G4S, Brinks Prosegur Others Others 15
Slide 16: Our Strategy
Creating value by adding growth OUR STRATEGY 16
Slide 17: Strategy
Strategy Market presence + Comprehensive solutions + Operational excellence = Growth Current markets Change of Mix Price Top line • No 1 or 2 • Defend CIT • Value driven • Add on acquisition volumes • Premium branding • Increased focus on Margin growing CMS Branch New markets • Efficiency • Close ga
Slide 18: Market Presence
Strategy MARKET PRESENCE \ 18 Managing cash in society.
Slide 19: Market presence – current and future
Market presence – current and future USA Western Europe Central and Strengths Strengths Eastern Europe • Cash intensive • Degree of outsourcing Strengths • Economy of scale/Size Opportunities • Growing markets • Degree of outsourcing Opportunities • Cash intensive • Consolidation • Economy of scale
Slide 20: Comprehensive Solutions
Strategy COMPREHENSIVE SOLUTIONS 20
Slide 21: Comprehensive solutions
Comprehensive solutions Europe USA 21% 35% CMS Current situation CMS CIT 65% CIT 79% Managing Cash in Society Drivers Transport • Increasing amount of cash in society • Increased demand on efficiency – CMS • Innovation of services – SafePoint Time 21
Slide 22: Operational Excellence
Strategy OPERATIONAL EXCELLENCE 22
Slide 23: Price
Price Strategy • Charge for value delivered • Utilize the Loomis Brand Tactics • Realistic conditions in customer contracts • Always ensure that % annual price increase > wage increase • Value based Pricing, never incremental or cost + Pricing • Utilizing of the Loomis Brand 23
Slide 24: Branch
Branch Strategy • Empowering Branch managers • Accountability – Responsibility • Measure – Monitor – Manage Tactics • Ensure branch managers have full accountability for their result • Encourage and motivate through the branch ranking • Strive for more industrialized CMS operation • Share best pract
Slide 25: Risk
Risk Strategy • Minimize risks through technology and procedures Tactics • Higher accountability for the operationally responsible staff, Risk is an integral part of the business • Develop in each country, branch by branch, a Risk plan, including prioritized Capex • Global Risk shall follow up to en
Slide 26: Our Goals
Financial and operational OUR GOALS 26
Slide 27: Financial goals and dividend policy
Financial goals and dividend policy % 12 8 EBITA Annual operating profit margin (EBITA) 4 10% at latest 2014 0 2007 2008 2009 Q3-YTD, 2010 % 150 100 Cash conversion Operating Cashflow/EBITA > 85% 50 0 2007 2008 2009 Q3-YTD, 2010 2,5 2 Net 1,5 Net Debt/EBITDA not exceeding 2.5 1 Debt/EBITDA 0,5 0 200
Slide 28: Operational goals
Operational goals Strategy Operational goals • Number 1 or 2 in every market we operate • Expansion into two new countries annually Market presence • Establish footprint in Latin America Comprehensive solutions At least 30% CMS Price – Price increases to exceed wage increases Operational excellence
Slide 29: Margin improvements
Margin improvements Trend Activities Impact on margin Price • Price pressure in • Premium Brand and several markets Premium Price • Pressure for salary • Price increase above increases despite wage increase economic climate Branch • Decrease in number • All Branches individually of underperforming m
Slide 30: Loomis
\ LOOMIS Managing cash in society.