Page 64 - Loomis Annual Report 2017

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Administration Report
Loomis Annual Report 2017
SEK m
2016
2015
2014
2013
Consolidated statement of income
Total revenue
Operating income (EBITA)1) Net income for the year
Consolidated statement of cash ows
Cash ow from operations
Cash ow from investment activities Cash ow from nancing activities Cash ow for the year
Consolidated balance sheet
Capital employed Net debt Shareholders’ equity
16,800 1,890 1,258
2,665 –1,175 –1,510
–20
10,576 3,929 6,647
16,097 1,703 1,069
2,118 –1,658 –386
74
10,268 4,425 5,843
13,510 1,370 910
1,819 –2,569 946
196
9,127 4,219 4,907
11,364 1,099 736
1,302 –709 –641
–48
6,290 2,125 4,165
17,228
2,093
1,428
2,313
–1,619
–487
207
Dec. 31, 2016
Dec. 31, 2015
Dec. 31, 2014
Dec. 31, 2013
SEK m
Dec. 31, 2017
10,860
1) Earnings before interest, taxes, amortization of acquisition-related intangible xed assets, acquisition-related costs and revenue, and Items affecting comparability.
Strategy summary
Loomis is aiming to take a step further in the value chain by o ering new services and seizing new growth opportunities. The core ele- ments of the strategy involve increasing the growth rate for the core products in less mature markets and, in more mature markets, increasing the o ering of services that generate higher pro tability and are closely linked to the current core business. Loomis will con- tinue to optimize its global business model to further improve its Cash Management Services (CMS) and SafePoint o erings in the USA and Europe. Loomis is also raising the estimate for the Safe- Point market in the US from 300,000 to 400,000 units. Loomis is expecting to be able to reach an installation rate of 10,000 Safe- Point units a year in the USA towards the end of the strategy period. The European SafePoint market at this time is estimated at 200,000 units. To support the strategy, two Centers of Excellence and one Center of Innovation will be created. One Center of Excel- lence will be located in Houston, Texas, USA and will focus on solu- tions for SafePoint and other on solutions for retail customers. The other Centre of Excellence will be located in Madrid, Spain and will focus on CIT and CMS. The Center of Innovation will be based in Stockholm, Sweden. The goal is to increase the pace of knowledge sharing within the Loomis Group and to facilitate the e cient implementation of new services and technologies.
By moving further along the value chain and o ering services such as ATM management and foreign currency management, front and back o ce services for retail customers and banks and, in the longer term, digital platforms, Loomis will be able to reach new market segments. These o erings will be able to support the cus- tomers in a better way while also increasing Loomis’ market poten- tial.
Loomis sees acquisitions as a key component in the strategy and expects a large portion of growth to come from selective acquisi- tions during the strategy period. Loomis will prioritize acquisitions in existing markets as well as investments in new technology and new services. Loomis will continue to develop the Loomis Model by adding new knowledge and expertise. This will include areas such as innovation, IT and technology. To support this strategy Loomis has made some organizational changes. The rst change was to combine all three European regions into one region (Europe). Georges Lopez who was formally Regional President Southern Europe was appointed as President Region Europe. The change will not only contribute to extensive gains in terms of knowledge-shar- ing and implementation of new services, but will also provide cost
synergies with respect to operating costs and capital expenditures. The new organizational structure in Europe went into e ect on October 1, 2017. As a result of the change, Kenneth Högman, Regional President, UK and Patrik Högberg, Regional President Northern and Eastern Europe, have taken on new roles within the Loomis Group. Lars Blecko, currently Regional President USA will be appointed as Chairman of the Board for Loomis USA, while Aritz Larrea, currently Country President in Spain, will take over as Regional President USA as of June 1, 2018.
On December 22, 2017 Loomis announced what e ect the US tax reform will have on Loomis. As a result of the reduced tax rate in the USA – from 35 to 21 percent – and based on estimates available at that time, Loomis was expecting to report one-o tax credit in the range SEK 55–70 million for the fourth quarter of 2017. The one-o tax credit is attributable to remeasurement of the deferred tax lia- bilities that Loomis US has on its balance sheet. The positive tax e ect in the fourth quarter of 2017 was not expected to have any material e ect on cash ow. The nal outcome, reported for the fourth quarter of 2017, was positive tax income of SEK 70 million. For the 2018 nancial year and based on current estimates, the Group’s tax rate is expected to be between 25 and 26 percent.
Revenue and income
The Group
Revenue for the full year 2017 amounted to SEK 17,228 million compared to SEK 16,800 million the previous year. Sustained good growth in the USA was the main explanation for the organic growth of 2 percent (5). Real growth of 3 percent (5) was positively
a ected by acquisitions made in Denmark and Belgium, but nega- tively a ected by the divestment in 2016 of the
general cargo operations.
The operating income (EBITA) for the full year amounted to SEK
2,093 million compared to SEK 1,890 million the previous year. At comparable exchange rates the income improvement was around SEK 222 million and the operating margin amounted to 12.1 per- cent (11.2). The improved pro tability is mainly explained by an increase in the number of installed SafePoint units, economies of scale resulting from increased volumes in CMS and by better e - ciency within the CIT operations in the USA. Pro tability was also positively a ected by the continuous Group-wide e orts to improve e ciency, which continued to yield results in a number of Euro- pean countries.
The operating income for the period (EBIT) amounted to SEK
2017
3,823
7,037