gunnebo q3 2018 - external · 2019-08-19 · gunnebo group q3 2018 23 october 2018 the group in...

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Gunnebo Group Q3 201823 October 2018

The Group in Brief – Continuing Operations

4,900 MSEK

Turnover 2017

4,400

No of Employees

25

Sales Companies

100

Distributor Markets

OfferingSafe Storage, 36%

Cash Management, 21%

Entrance Control, 21%

Integrated Security, 22%

© Gunnebo Group.2 Q3 2018

2

Strong Growth and Continued Streamlining

• Sales growth in all three of thecore Business Units

• Double-digit growth in bothEntrance Control and SafeStorage

• Improved result for continuingoperations

CEO Comments on Q3

“During the third quarter we havecontinued to streamline the business and shift our focus from region to product.”

Henrik Lange, President and CEO


• Net sales amounted to MSEK 1,303(1,164), sales growth was 6%

• EBITA amounted to MSEK 92 (85) andthe EBITA margin was 7.1% (7.3)

• EBITA YTD of Safe Storage, CashManagement & Entrance Control was311 (270)

Summary of the Quarter Continuing Operations

Sales Sales Sales2018 2017 growth 2018 2017 growth 2017 growth

Net sales, MSEK Q3 Q3 % YTD YTD % Full year %

Safe Storage 479 392 15 1,320 1,259 2 1,708 -8

Cash Management 252 233 2 794 777 -1 1,031 8

Entrance Control 296 238 17 768 634 17 894 10

Integrated Security 276 301 -11 826 891 -7 1,228 -6Total 1,303 1,164 6 3,708 3,561 2 4,861 -1

2018 Margin 2017 Margin 2018 Margin 2017 Margin 2017 Margin

EBITA, MSEK Q3 % Q3 % YTD % YTD % Full year %

Safe Storage 44 9.2 23 5.9 107 8.1 80 6.4 126 7.4Cash Management 20 7.9 22 9.4 80 10.1 93 12.0 120 11.6Entrance Control 55 18.6 45 18.9 124 16.1 97 15.3 145 16.2Integrated Security -1 -0.4 26 8.6 -6 -0.7 72 8.1 107 8.7Group Functions -26 - -31 - -71 - -87 - -123 -Total 92 7.1 85 7.3 234 6.3 255 7.2 375 7.7


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Cash Management

Entrance Control

Safe Storage 36%of Sales

8.1%EBITA

Integrated Security

21%of Sales

10.1%EBITA

21%of Sales

16.1%EBITA

22%of Sales

-0.7%EBITA

2%Sales Growth

-1%Sales Growth

17%Sales Growth

-7%Sales Growth

Business Unit Performance YTD 2018, % Continuing Operations


Business Unit Safe Storage Q3 2018 Continuing Operations

• 36% of Group Sales (YTD)

• Sales increased by 15% in the third quarter

• General good sales development for ATM safes

• Strong sales growth in Americas, with a high level of sales in the channel partner network

• Sales growth in most markets in Asia-Pacific. Positive development in sales to private banks in the India.

• Positive development on most major markets in Europe

SALES BY REGION, YTD 2018

MSEK

58%26%

16%

EMEA APAC Americas

0%

2%

4%

6%

8%

10%

12%

14%

0

100

200

300

400

500

600

1 2 3 4 1 2 3 4 1 2 3

2016 2017 2018

Sales

EBITA, % 12M

EBITA, %

2018 2017 2018 2017 2017

Q3 Q3 YTD YTD Full year

Net sales, MSEK 479 392 1,320 1,259 1,708

Sales growth, % 15 -9 2 -5 -8EBITA, MSEK 44 23 107 80 126

EBITA margin, % 9.2 5.9 8.1 6.4 7.4Items affecting comparability (IAC), MSEK -2 -8 -7 -11 -27

Operating capital employed 528 459 528 459 444

Safe Storage


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• India: A leading Indian gold loan company continues to engageGunnebo to enhance safety levels in its existing safes used to storegold

• Denmark: A major bank invests in automated safe deposit solution,SafeStore Auto, to be installed in its prime branch in Århus

• Switzerland: Banque Gonet extends its customer offering by investingin safe deposit lockers

• China: A Chubbsafes-branded experience centre for panic rooms withvault door opens in Hangzhou

• US: A large bank extends its branch network and places major ordersfor safe storage solutions

• US: Delivery of customised solutions to a government authority

• Canada: A large bank entrusts Gunnebo to install an alternative vaultsolution in one of their main branches

Business Unit Safe Storage – Q3 2018 Highlights


Business Unit Cash Management Q3 2018 Continuing Operations



• Strong sales development in the Middle East due to major deliveries to a regional CIT company

• Good levels of sales of the closed cash management system, SafePay, in the Nordics

• In region Americas, sales in Brazil also showed growth. Sales in the US developed more weakly, mainly due to continued delays in investments in bank projects

• In Asia-Pacific, Cash Management is still a small part of sales. Development was good in Australia.


MSEK

69%

9%

22%

EMEA APAC Americas

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

50

100

150

200

250

300

350

1 2 3 4 1 2 3 4 1 2 3

2016 2017 2018

Sales

EBITA, % 12M

EBITA, %

2018 2017 2018 2017 2017


Net sales, MSEK 252 233 794 777 1,031

Sales growth, % 2 6 -1 12 8EBITA, MSEK 20 22 80 93 120


Operating capital employed, MSEK 291 272 291 272 284

Cash Management


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• Germany: Retailer places major order for Gunnebo's cashdeposit solutions, to be rolled out over the coming five years

• Sweden: Energy company ST1 with petrol stations nationwideinvests in SafePay closed cash management system

• Netherlands: Continued good order intake from CIT companyusing cash management solutions from Gunnebo to optimiseits retail offering

• Australia: Major retailer signs two-year service contract for itsinstalled base of cash management solutions

• Middle East: Large CIT company in the Middle East continuesto place orders for Gunnebo’s cash management solutions tostreamline the cash process for its retail customers

• Brazil: Gunnebo Cash Management solutions continueto grow in retail with a positive kick-off in the petrol stationsegment

Business Unit Cash Management – Q3 2018 Highlights


Business Unit Entrance Control – Q3 2018 Continuing Operations



• Asia-Pacific continued to develop positively, with deliveries on major projects to high-risk sites in India

• In Europe, sales developed well, especially in the Nordics and UK. Several major deliveries to airports and mass transit customers.

• Strong sales development in Americas, where growth is primarily coming from customer segment Public & Commercial Buildings


MSEK

55%33%

12%

EMEA APAC Americas

0%2%4%6%8%10%12%14%16%18%20%22%

0

50

100

150

200

250

300

350

1 2 3 4 1 2 3 4 1 2 3

2016 2017 2018

Sales

EBITA, % 12M

EBITA, %

2018 2017 2018 2017 2017


Net sales, MSEK 296 238 768 634 894

Sales growth, % 17 21 17 19 10EBITA, MSEK 55 45 124 97 145



Entrance Control


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• Switzerland: Several public high-risk sites in Genevaincrease entrance security with solutions from Gunnebo

• South Korea: The performance of Gunnebo’s airportgate solutions makes Gunnebo stand out from thecompetitors and wins an order for ImmSec to beinstalled in two airports in South Korea

• China: Hangzhou Metro Line No.5 in China installsGunnebo’s MFL for flow control and fare collection

• Middle East: Gunnebo’s high-security range foroutdoor perimeter protection, elkosta, is specified insecurity projects for critical sites in Saudi Arabia

• India: Business for metro gates for metro projects isdeveloping well

• US: Good initial success in several airport projects

Business Unit Entrance Control – Q3 2018 Highlights


Business Unit Integrated Security – Q3 2018 Continuing Operations


• The sales contraction from previous quarter in 2018 continued into the third quarter

• Overall weak sales development in Europe

• Sales in Asia-Pacific contracted

• In Americas, sales developed positively mainly in Brazil and Mexico


MSEK

46%

22%

32%

EMEA APAC Americas

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

0

50

100

150

200

250

300

350

400

1 2 3 4 1 2 3 4 1 2 3

2016 2017 2018

Sales

EBITA, % 12M

EBITA, %

2018 2017 2018 2017 2017


Net sales, MSEK 276 301 826 891 1,228

Sales growth, % -11 -2 -7 -8 -6EBITA, MSEK -1 26 -6 72 107

EBITA margin, % -0.4 8.6 -0.7 8.1 8.7Items affecting comparability (IAC), MSEK -3 -8 -11 -12 -13


Integrated Security


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• Mexico: Banamex invests in upgrading its branch network acrossthe country

• Canada: Retail chain North West turns to Gunnebo to upgrade lossprevention solutions in its stores nationwide

• India: Sales of fire equipment marketed and sold under theMinimax brand continue to develop well

• Brazil: DPSP Group shows continued trust in Gunnebo byinstalling EAS solutions in more than 80 stores during the quarter

• Brazil: An important deal for Electronic Article Surveillance andCCTV equipment for 16 supermarkets, increases Gunnebopartnership with GPA, Brazil’s largest retail and distribution chain

• Spain: As part of the increased focus on the main Business Units,a small local alarm monitoring business for consumers has beendivested

Business Unit Integrated Security – Q3 2018 Highlights


• Local integrator business – not core forthe future of Gunnebo

• Scope: French sales company,production facilities in Baldenheimand Bazancourt, and the Belgian andLuxembourg business

• 2017 turnover: MEUR 117

• 2017 no. of employees: 930

• In the third quarter, the ongoingdivestment has been subject to workscouncil consultation, which hassuccessfully been completed. Fullclosing is expected to take place inquarter four after antitrust clearance.

“The planned divestment of the French, Belgian and Luxembourg integrator business is in line with our strategy to become a more product-focused company. With OpenGateas the owner, this business will have the right foundation to further develop its business in line with its own clearly defined agenda.”

Henrik Lange, President & CEO

Update: Business in France, Belgium and Luxembourg Under Divestment


Discontinued Operations

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• Net sales amounted to MSEK 1,303 (1,164),sales growth was 6%

• EBITA amounted to MSEK 92 (85) and theEBITA margin was 7.1% (7.3)

• EBIT amounted to MSEK 88 (63) and theEBIT margin was 6.8% (7.2)

• EBIT includes the sales of monitoringbusiness in Spain (MSEK 21) and a one timeimpairment of intangible asset (MSEK -11)

• Net profit for the period for the continuingoperation was MSEK 56 (25). Including thediscontinued operation net profit for theperiod, was MSEK 11 (16)

• Free cash flow was MSEK 15 (-63)

Summary of the Quarter

Sales Sales Sales2018 2017 growth 2018 2017 growth 2017 growth

Net sales, MSEK Q3 Q3 % YTD YTD % Full year %

Safe Storage 479 392 15 1,320 1,259 2 1,708 -8

Cash Management 252 233 2 794 777 -1 1,031 8

Entrance Control 296 238 17 768 634 17 894 10

Integrated Security 276 301 -11 826 891 -7 1,228 -6

Total 1,303 1,164 6 3,708 3,561 2 4,861 -1

2018 Margin 2017 Margin 2018 Margin 2017 Margin 2017 Margin

EBITA, MSEK Q3 % Q3 % YTD % YTD % Full year %

Safe Storage 44 9.2 23 5.9 107 8.1 80 6.4 126 7.4Cash Management 20 7.9 22 9.4 80 10.1 93 12.0 120 11.6Entrance Control 55 18.6 45 18.9 124 16.1 97 15.3 145 16.2Integrated Security -1 -0.4 26 8.6 -6 -0.7 72 8.1 107 8.7Group Functions -26 - -31 - -71 - -87 - -123 -

Total 92 7.1 85 7.3 234 6.3 255 7.2 375 7.7

2018 2017 2018 2017 2017

Other financial information, MSEK Q3 Q3 YTD YTD Full year

Amortisation and impairment from acquisition related intangibles -16 -6 -27 -18 -22

Items affecting comparability (IAC) 12 -16 -9 -29 -52

EBIT 88 63 198 208 301

Net profit for the period 56 25 98 88 152

Earnings per share, SEK 0.74 0.33 1.30 1.14 1.90

Discontinued operations

Net profit for the period -45 -9 -694 -4 8

Earnings per share, SEK -0.59 -0.12 -9.10 -0.05 0.10

Continuing and discontinued operations

Net profit for the period 11 16 -596 84 160

Earnings per share, SEK 0.15 0.21 -7.80 1.09 2.00

Free cash flow 15 -63 -9 -145 -74

EBIT and EBITA by Quarter, MSEK Continuing Operations

0

20

40

60

80

100

120

140

160

180

1 2 3 4 1 2 3 4 1 2 3

2016 2017 2018

EBITA EBIT


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EBITA Margin by Quarter, % Continuing Operations

0%

2%

4%

6%

8%

10%

12%

1 2 3 4 1 2 3 4 1 2 3

2016 2017 2018

EBITA % EBITA % 12M


EBITA Bridge by QTD, MSEK Continuing Operations

EBITA BRIDGE Q3EBITA 2017 85

Organic 16

Structure 8

Currency 4

Other -21

EBIT 2018 92


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Group Income Statement, MSEK

2018 2017 2018 2017 2017MSEK Q3 Q3 YTD YTD Full year

Net sales 1,303 1,164 3,708 3,561 4,861

Cost of goods sold -940 -827 -2,668 -2,517 -3,447

Gross profit 363 337 1,040 1,044 1,414

Selling and administrative expenses -284 -275 -866 -842 -1,127

Other operating income and expenses, net 9 1 24 6 14

EBIT 88 63 198 208 301

Financial income and expenses, net -10 -13 -35 -41 -54

Profit before taxes 78 50 163 167 247

Income taxes -22 -25 -65 -79 -95

Net profit for the period from continuing operations 56 25 98 88 152

Net loss/profit for the period from discontinued operations -45 -9 -694 -4 8

Net profit/loss for the period 11 16 -596 84 160

Net profit/loss attributable to:

Shareholders of the Parent Company 10 16 -596 83 153

Non-controlling interests 1 0 0 1 7

Net profit/loss for the period 11 16 -596 84 160

Weighted average number of basic shares, thousand 76,422 76,320 76,354 76,320 76,320

Weighted average number of diluted shares, thousand 76,443 76,393 76,423 76,385 76,389

Earnings per share, SEK 0.15 0.21 -7.80 1.09 2.00

Of which, continuing operations, SEK 0.74 0.33 1.30 1.14 1.90

Of which, discontinuing operations, SEK -0.59 -0.12 -9.10 -0.05 0.10

Earnings per share after dilution, SEK 0.15 0.21 -7.79 1.08 2.00

Of which, continuing operations, SEK 0.74 0.33 1.30 1.13 1.90

Of which, discontinuing operations, SEK -0.59 -0.12 -9.09 -0.05 0.10© Gunnebo Group.19 Q3 2018

Discontinued Operations – Q3 2018

• Net sales for discontinued operations inthe third quarter amounted to MSEK 242(245)

• EBIT related to the operations amountedto MSEK -41 (-14) and net result fromoperating activities amounted to MSEK -45 (-9)

• The loss on the divestment recorded wasMSEK -609 YTD

Gunnebo has signed an offer from global private equity firm OpenGate Capital to acquire Gunnebo’s business in France, Belgium and Luxembourg. The divestment has been subject to works council consultation, which has successfully been completed. Full closing is expected to take place in quarter four after antitrust clearance.

The ongoing divestment includes the French sales company, production facilities in Baldenheim and Bazancourt as well as the Belgian and Luxembourg business.

2018 2017 2018 2017 2017MSEK Q3 Q3 YTD YTD Full year

Net sales 242 245 768 798 1,130

EBIT from operating activities -41 -14 -94 -8 3

Result from operating activities -45 -9 -85 -4 8

Loss on divestment - - -609 - -

Net profit/loss from discontinued operations -45 -9 -694 -4 8

Total assets of disposal group held for sale 431 975 431 975 1,021

Total liabilities of disposal group held for sale 564 519 564 519 546


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Free Cash Flow, MSEK Continuing and Discontinued Operations


MSEK2018 Q3

2017 Q3

2018 YTD

2017 YTD

2017Full year

Operating profit 48 49 -338 200 304Depreciation 17 16 48 50 66Amortisation and impairments, acquisition related intangibles 16 6 27 18 22Impairments and write-downs, discontinued operations 0 0 413 0 0Amortisation - other intangibles 9 7 26 20 29Other -43 -42 -95 -127 -150Change in working capital 1 -65 -1 -213 -200Operating cash flow 48 -29 80 -52 71Investing cash flow excluding acquisitions -33 -34 -89 -93 -145Free cash flow 15 -63 -9 -145 -74

Free Cash Flow by Quarter and Last Twelve Months, MSEK Continuing and Discontinued Operations

Free cash flow 12M


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Net Debt/EBITDA Continuing and Discontinued Operations

MSEK


Annual Sales Growth of 5% Growth* 6%

EBITA of >10%Profitability*

Net Debt/EBITDA of <2.5Net Debt /EBITDA**

Annual Dividend of 30-50% of the Net ProfitDividend**

Sustainability**

TargetOutcome

Q3 YTD

• Reduce use of electricity, CO2 emissions and increase recycling

• All manufacturing units ISO 14001 certified

• All major suppliers compliant with Code of Conduct

• All major manufacturing units OHSAS 18001 certified

2%

7.1% 6.3%

3.5 3.5

60% FY 2017

* Continuing Operations** Incl Discontinued Operations

Group Targets & Outcome Q3/YTD 2018


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• 15 November, 2018 CMD 2018

• 6 February, 2019 Year-End Report 2018

• 11 April, 2019 AGM 2019

• 26 April, 2019 Q1 Report 2019

• 19 July, 2019 Q2 Report 2019

Financial Calendar


www.gunnebogroup.com

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• Definition: Growth in net sales inconstant currencies, hence includingboth organic and acquired growth

• Target is to grow the main BusinessUnits in line with market or better

• With focus on the main Business Units,the Group will be better structured tocapture growth in the market

Annual Sales Growth of 5%

Continuing Operations


• Definition: EBIT excluding IAC andacquisition related amortization andimpairments. For the Business Units, nocosts for Group functions are allocated.

• Target is to reach a 10% EBITA throughfocusing on the main Business Units,driving both topline growth and marginimprovements.

• EBITA target defined by Business Unitwill allow dedicated focus on drivingimprovements.

EBITA of >10%

Continuing Operations

0%

2%

4%

6%

8%

10%

12%

0

20

40

60

80

100

120

140

160

180

1 2 3 4 1 2 3 4 1 2 3

2016 2017 2018

EBITA EBITA % 12M EBITA %


15

• Definition: Period end net debt excludingpension liabilities divided by EBITDA forthe last 12 months

• Will ensure the Group’s capital strength.

• Target will drive a clear cash flow focusby Business Unit.

• When acquisition is performed theGroup expects the Net Debt/EBITDA toincrease and over time reduce to anormalized level again.

Net Debt/EBITDA of <2.5

0,000,501,001,502,002,503,003,504,004,505,005,50

0200400600800

1 0001 2001 4001 6001 800

1 2 3 4 1 2 3 4 1 2 3

2016 2017 2018

Net debt incl. post-employment benefits (PEB)

Net debt

Net debt incl. PEB/EBITDA

Net debt/EBITDA


• Increase from 30-40% of net profit to30-50% will ensure good direct return.

• The Business Unit focus will giveincreased profitability enough to bothreinvest in our business and alsoincrease the dividend level to theGroup’s shareholders.

• By ensuring a Business Unit focus theGroup will improve its profitability andthus dividends over time.

Dividend of 30-50% of Net Profit

0%

20%

40%

60%

80%

2014 2015 2016 2017

Annual dividend of net profit, %


gunnebo q3 2018 - external · 2019-08-19 · gunnebo group q3 2018 23 october 2018 the group in...

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