“We are well on the way to reach perhaps the most important financial goal which we presented during the autumn of 2010, an operating margin of 10 percent by 2014, at the latest. Now that almost half of this period has passed, the operating margin amounts to 8.6 percent for the rolling twelve month period and to 9.8 percent for the third quarter. Adjusted for the non-recurring cost in Denmark, the operating margin was 10.3 percent for the third quarter”.
This was the statement made by the President and CEO of Loomis, Lars Blecko, in conjunction with the Group’s Capital Markets Day in London yesterday (14th Nov 2012).
Blecko also noted that a number of the operational goals had already been reached, or were within touching distance –
“We are number one or two in the majority of the markets in which the Group operates; we have undertaken an acquisition in Latin America; the proportion of revenue from comprehensive solutions (CMS) has passed the 30 percent mark, and the share of branches which have not achieved the Group’s profitability targets is on the way to reaching the goal of 15 percent”.
During the Capital Markets Day, a number of examples were presented as to how Loomis’ subsidiaries work.
Jarl Dahlfors, Regional President USA, described, amongst other things, the process of transforming the operations from solely focusing on cash transportation to operations delivering comprehensive solutions. An example is that the number of Loomis SafePoint®, one of the market’s most advanced solutions for the storage of cash for retailers and restaurants, has increased by 55 percent to 8,000 units installed in 2012 alone. He also noted that the operating margin for the USA segment increased by 1.5 percentage points compared with the third quarter 2011, which is a result of increased efficiency in the operations.
Loomis’ operations in Spain have, in terms of earnings, been positive, in spite of the financial crisis prevalent in the country.As described by Georges Lopez Periago, Regional President Southern Europe, this situation is primarily due to the fact that there is an increased focus on the retail trade in conjunction with the shrinking of the banking sector. Furthermore, similar to the USA, an increase in the proportion of comprehensive solutions has been seen.
In Sweden, Loomis has continued to increase its margins and profitability over a number of years, in a market which is mature and is shows no growth in terms of volume. Patrik Högberg, Country President, Sweden, described how this has been achieved. Högberg attributes this development primarily to focusing on cost efficiency throughout the entire operations, on everything from decreasing costs at the branches to introducing a new tool optimizing the routes taken by the vehicles when collecting and depositing cash.
Loomis’ strategy and working methods, in conjunction with its entry into the Czech market approximately two years ago, were then described by Kenneth Högman, Regional President Northern Europe. Högman states that the primary success factors have been the acquisition of a local company as a platform to achieve a leading market position with increasing margins, the utilization of Loomis recognized brand name and a strong organization positioned for growth and increased profitability.
Anders Haker, CFO of Loomis, presented an overview of the Group’s financial position and stated, similar to Lars Blecko, that the financial goals for 2014 are within sight.
Patrik Andersson, who works with strategy development, described the extensive analysis of the future for cash which the Group has undertaken.
The conclusion was, amongst other things, that the use of cash is expected to increase in all of Loomis’ markets except in Sweden. Alternative payment methods will, according to this study, take larger and larger shares, but the flow of cash is also expected to increase as a result of economic growth.