Loomis : Interim Report January-June 2020 - presentation

Q2 - 2020

President & CEO Patrik Andersson

24 July, 2020

The Corona Pandemic

• Well being of our employees on top of the agenda
• Loomis' employees have done a fantastic job of maintaining high quality services despite a very challenging situation
• False rumours circulate that cash spreads the virus. The rumours have been denied by medical experts. More information available atwww.loomis.com
• Loomis has an important role to fill as a crucial provider in a well functioning cash ecosystem
• Good possibility for Loomis to take advantage of the current situation as services have continued to be on a high level despite the difficult circumstances
• All Loomis' branches are running but not everyone at full capacity
• Postponement of capital expenditures
• Reduction of all variable costs of high priority - Loomis has a good track record of restructuring businesses
• Resolution on dividend postponed
• New credit facility of SEK 1,200 million signed
• Positive free cash flow of SEK 350 million in second quarter 2020 despite the pandemic

2

Highlights

• Recent events
• • Resolution on dividend postponed to an expected extraordinary general meeting later this year
  • Approval of acquisition of Nokas cash handling in Sweden received in June
• Real growth -18 percent (4)
• • Acquisition in France of CIT and CMS business in July 2019
• Organic growth -20 percent (3)
• • Significant negative effects due to the pandemic
  • Larger negative impact in Europe compared to USA due to the structure of the customer portfolios
  • The quality of services continues to be on a high level despite a challenging situation. This opens up for future opportunities
• Operating margin 4.8 percent (11.7)
• • Negative impact from the corona pandemic due to volume losses, which primarily affected Europe
  • The trend is positive. Europe reported operating profits in June
  • US operations show strength and reported increased operating margin
• EPS SEK 0.02 (4.89)
• • In addition to above, also affected by a write-down of goodwill within the European operations
• Operating cash flow 264 percent (166) of EBITA

3

 High cash conversion as an effect of lower capital expenditures and positive working capital movements

4.2

Billion SEK revenue

-20%

Organic growth

4.8

Percent operating

margin

Segments

Europe Q2 2020

• Real growth -25 percent (6)
• • Acquisition in France of CIT and CMS business in July 2019
  • Integration process to realize synergies in France ongoing but at a lower pace during the quarter due to the pandemic. The process is intensified as the pandemic situation is improving
  • Integration of Nokas in Sweden initiated and expected to yield positive results 2021
• Organic growth -29 percent (3)
• • Negative effects due to the pandemic, however clear signs of recovery is visible.
  • Significant impact in Spain, France and UK
  • Several growth opportunities identified and pursued
• Operating margin -3.4 percent (11.7)
• • Margin negatively affected by lower volumes
  • Gradual improvements since April. June operating results were positive

4

53%

Share of Group's R12 revenue

Segments

USA Q2 2020

• Organic growth -9 percent (3)
• • SafePoint services continue to increase and accounted for 18 percent (16) of total US revenue. The revenue growth was temporarily lower compared to previous quarters as the terms on some customer contracts were restructured due to the pandemic. Measures only affects the timing of revenue recognition
  • CMS was 33 percent (34) of total revenue. The effects of the pandemic causes a temporary shift in the business mix
  • High quality services have been maintained throughout the crises period and inflow of new customers visible
• Operating margin 15.1 percent (13.7)
• • All time high Q2 operating margin
  • SafePoint expansion contributes to higher margin
  • Focus on a customer portfolio with high quality continues
  • Efficiency programs at branches successfully drive higher margin

47%

Share of Group's R12 revenue

5

Financials

Statement of income

Statement of income	2020	2019
SEK m	Apr-Jun	Apr-Jun	Rolling 12

Revenue	4,239	5,204	20,401
Real growth, %	-18	4	-1
Organic growth, %	-20	3	-4
Operating income (EBITA)	202	607	2,221
Operating margin, %	4.8	11.7	10.9
Amortization	-28	-25	-105
Acquisition related costs	-32	-21	-115
Items affecting comparability	-46	-6	-50
Net financial items and monetary loss	-54	-65	-206
Income before taxes (EBT)	42	489	1,744
Income taxes	-40	-122	-477
Net income	2	367	1,267
Net margin, %	0.0	7.1	6.2
Earnings per share, diluted (SEK)	0.02	4.89	16.84

6

Q&A