At the Capital Markets Update, to be held in London today, Loomis will update on the trajectory of the business in relation to the targets and strategy launched in 2017 for the period 2018-2021.
Key-themes on today’s update will include illustrating that Loomis is on track to reach its financial targets for 2021, with further opportunities ahead beyond cash-in-transit (CIT) and cash management services (CMS). The opportunities include physical foreign exchange (FX), ATM management and digital payment solutions.
Cash continues to be an important payment method as cash in circulation keeps growing. Increased outsourcing from banks and new services provided drive growth in the global cash handling market. Loomis holds a global number 2 position within the cash handling market.
2021 targets within reach
The revenue target of SEK 24 billion in 2021 is within reach. Rolling 12 months revenues, as of June 30, 2019, were above SEK 20 billion. Revenues were supported by acquisitions already made. A strong acquisition pipeline of companies with approximately SEK 10 billion in revenues brings further opportunities. Loomis has a strong financial position and intends to lead further consolidation of the market.
Loomis target for EBITA1 margin 2021 is a range between 12 percent and 14 percent. As of June 30, 2019, Loomis reached 11.9 percent on a rolling 12 months EBITA margin level and sees further improvements going forward. Rolling 12 months EBITA, as of June 30, 2019, was almost SEK 2.5 billion, an improvement of 175 percent, in constant currency, since 2008.
Loomis is also dedicated to fulfill its sustainability targets. Since 2017 carbon emissions have been reduced by 4 percent and the use of plastic has decreased by 26 percent.
Further opportunities ahead
Loomis continues its journey to lead the transformation of the Cash Ecosystem by introducing new services and moving up the value-chain in the industry. The third and fourth waves of outsourcing from banks and other operators are supporting both growth and operating margins. These areas include, for example, FX and ATM related services. The FX market is estimated to SEK 10 billion in Europe where Loomis currently has a limited share but with an ambition to annually reach SEK 1 billion in revenues within the next three years.
The transformation of the ATM market also brings great opportunities to Loomis. In addition to CIT and CMS, the growth areas include; forecasting, first and second line maintenance, white labelling and rapidly growing independent ATM operators that are seeking partners. This market is estimated to approximately SEK 10 billion in Europe. Loomis ambition, within the next five years, is to reach a market share of 20 percent with annual revenues of SEK 2 billion.
New Payment Systems also brings further opportunities. Through access to a large retail base, partnerships and acquisitions, Loomis can take a new position in this field. In 2018, Loomis launched a partnership with the virtual ATM provider, Sonect. This is in line with the strategy to offer advanced digital solutions to customers and build a bridge between physical and digital payments. Sonect’s new app has been launched in Switzerland and Sonect and Loomis are building the Swiss infrastructure together. The relationship forms an attractive revenue model and creates synergies with other business lines within Loomis.
“It is encouraging to see that Loomis is on track for our financial targets and at the same time launching new initiatives to take advantage of the constantly evolving industry of cash and payments. By taking concrete steps to advance in the value chain, we can increase the addressable market significantly while also adding margin accretive services that brings value to our customers”, says Patrik Andersson, President and CEO of Loomis Group.
The Capital Markets Update will start at 2.00 pm. GMT and the presentation material will be available on the Loomis website, www.loomis.com, after the meeting.
1Earnings before Interest, Taxes, Amortization of acquisition-related intangible fixed assets, Acquisition-related costs and revenue and Items affecting comparability.
September 5, 2019
Loomis holds Capital Markets Update in London and demonstrates that the financial targets are within reach
Loomis offers safe and effective comprehensive solutions for the distribution, handling, storage and recycling of cash and other valuables. Loomis customers are banks, retailers and other operators. Loomis operates through an international network of more than 400 branches in more than 20 countries. Loomis employs around 25,000 people and had revenue in 2018 of SEK 19.2 billion. Loomis is listed on Nasdaq Stockholm Large-Cap list.
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