Page 82 - Loomis Annual Report 2017

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Notes – Group
Loomis Annual Report 2017
Note 4 cont.
not possible to provide any detailed information regarding the timeline for tax out ows. For further information on taxes, refer to Note 14 and Note 34.
Actuarial calculations regarding employee bene ts such as pensions
Employee bene ts are normally an area in which estimates and assessments are not critical. However, for de ned bene t plans, particularly as regards pension bene ts, and where the pay- ments to the employee is several years into the future, actuar- ial assessments are required. These calculations are based on assumptions concerning economic variables, such as the dis- count rate, salary increases, in ation rates, pension increases, but also on demographic variables, such as expected life span. These assumptions are subject to critical estimates and assess- ments. As of the balance sheet date there were provisions for pensions and similar commitments totaling SEK 766 million (799) and receivables relating to pensions of SEK 18 million (13). The receivables are included in the item “Interest-bearing nancial xed assets.” For further information on pensions and on sensitivity analysis, refer to Note 30.
Actuarial calculations regarding claims reserves
The Group is exposed to various types of risks in the day-to-day operation of its business. These operational risks can result in the need to report provisions for damages resulting from prop- erty claims and personal injuries claims from the Cash handling operations, and workers’ compensation claims relating to the Group’s employees.
Claims reserves are recognized based on actuarial calcula- tions conducted on an ongoing basis. The actuarial calculations are based on information on open claims and historical data on incurred but not reported (IBNR) claims and on a number of dif- ferent assumptions. This means that the total claims reserves, which amount to SEK 339 million (405), are subject to criti-
cal estimates and judgements. For further information on taxes, please refer to Note 29.
The impact on the Group’s nancial position of ongoing disputes and the valuation of contingent liabilities
Over the years, the Group has made a number of acquisitions in different countries. As a result of such acquisitions, certain con- tingent liabilities of the acquired businesses have been assumed.
Companies within the Group are also involved in a number of other legal proceedings and tax audits arising from ordinary operating activities.
Similar to several other companies in Spain, Loomis’ Span- ish subsidiary has been under investigation by the Spanish competition authority (CNMC). In November 2016 the author-
ity informed Loomis Spain of its decision. The decision is to impose a ne of EUR 7 million on Loomis Spain for alleged mar- ket sharing. Loomis maintains that it has acted in compliance with the laws in effect and, accordingly, disagrees with the con- tent of the decision and the ne imposed. Loomis has appealed the decision in the Spanish courts. A possible negative outcome is not expected to have a negative impact on either the Group’s income or nancial position.
For further information on ongoing disputes and measurement of contingent liabilities, refer to Note 14, Note 31 and Note 34.
Effect of the Brexit referendum in the UK
Loomis operations in the UK primarily involve local customers and local currency is used. At this time it has therefore been deter- mined that the UK’s potential future exit from the EU will not have any material impact on Loomis’ local operations. The Group’s consolidated nancial statements will, however, be affected by the GBP’s development in relation to the Swedish krona.
NOTE 5
Events after the balance sheet date
On January 17, 2018 Loomis announced its acquisition of all of the shares in the limited partnership company KÖTTER Geldund Wertdienste SE & Co. KG (KGW”), which will be separated from the KÖTTER Group. KGW offers domestic cash handling ser- vices and its head of ce is in Essen, Germany. The enterprise value is around EUR 14 million, equivalent to around SEK 140 million. KGW has around 800 employees and the annual reve- nue for 2017 is expected to amount to around EUR 45 million. The acquired operations will be reported in Segment Europe and consolidated into Loomis’ accounts on the transaction clos- ing date, January 22, 2018. The purchase price was paid on closing. Due to acquisition and integration costs, the acquisition is expected to have a marginally negative impact on Loomis’ earnings per share for 2018.
On January 19, 2018 it Loomis announced its acquisition of Sequel International Logistics (USA) Inc. The enterprise value was around USD 2 million, equivalent to around SEK 16.5 mil- lion. The acquisition is not expected to have a material adverse impact on Loomis’ earnings per share for 2018.
Work on preparing an acquisition analyses for KÖTTER and Sequel is under way and preliminary acquisition analyses will be presented in the interim report for the rst quarter of 2018.
On February 14, 2018, Loomis announced that Kristoffer Wadman has been appointed Chief Innovation Of cer and that he will assume his position by latest June 1, 2018. Loomis cur- rent CFO, Anders Haker, will assume a new position as the Group’s Chief Investor Relations Of cer during the third quarter this year. Furthermore, Kristian Ackeby has been appointed the new CFO for Loomis and he will assume the position during the third quarter. Both Kristoffer Wadman and Kristian Ackeby will be part of the group management team.
The Board has decided to propose that a resolution be passed at the 2018 AGM on an incentive scheme (Incen-
tive Scheme 2018). Similar to Incentive Scheme 2017, the pro- posed incentive scheme (Incentive Scheme 2018) will involve two thirds of the variableremuneration being paid out in cash the year after it is earned. The remaining one third will be in
the form of Class B shares in Loomis AB which will be allot-
ted to the participants at the beginning of 2020. The allotment of shares is contingent upon the employee still being employed by the Loomis Group on the last day of February 2020, other than in cases where the employee has left his/her position due to retirement, death or a long-term illness, in which case the employee will retain the right to receive bonus shares. The prin- ciples of performance measurement and other general prin- ciples that are already being applied for the existing incen-
tive scheme will continue to apply. Loomis AB will not issue any new shares or similar instruments as a result of this incentive scheme. To enable Loomis to allot these shares, it is proposed that Loomis AB enters into a share swap agreement with a third party under which the third party acquires the Loomis shares in its own name and transfers them to the incentive scheme par- ticipants. The incentive scheme will enable around 350 of Loo- mis’ key employees to become shareholders in Loomis AB over time and will thereby increase employee participation in Loomis’ development, which will bene t all of the shareholders. To read the Board’s full incentive scheme proposal, refer to the notice of the AGM on www.loomis.com.