ceo comments · gunnebo interim report january-september 2012 25 october 2012, page 2 ... general...

Gunnebo interim report January-September 2012

25 October 2012, page 2

Profit for the quarter lower than previous year Quarter burdened by non-recurring items

of MSEK 46

Continued strong growth in Asia India: 47%

Good development of sales in Americas Canada and acquired business in Brazil and US

Weak development on most European markets General trend: Postponed investment decisions

Continued cost-savings in Europe during Q4

Strategic activity: Acquisition of US Hamilton Safe

Continued strong financial position, equity ratio 39%

CEO Comments


Third Quarter 2012

Order intake amounted to MSEK 1,084 (1,175), in constant currency rates it decreased by 1%. Acquired units contributed MSEK 79.

Net sales increased to MSEK 1,280 (1,247), in constant currency rates they increased by 8%. Acquired units contributed MSEK 107.

Operating profit amounted to MSEK 17 (61) and the operating margin to 1.3% (4.9%). Acquired units had a positive effect on operating profit of MSEK 21.

Excluding non-recurring items of MSEK 46, operating profit amounted to MSEK 63 (74) and operating margin to 4.9% (5.9).

Profit after tax for the period totalled MSEK 1 (44).

Earnings per share were SEK -0.02 (0.58).

Acquisition of US’s Hamilton Safe on August 8


January-September 2012

Order intake increased to MSEK 3,933 (3,868), in constant currency rates it increased by 3%. Acquired units contributed MSEK 155.

Net sales increased to MSEK 3,719 (3,645), in constant currency rates they increased by 4%. Acquired units contributed MSEK 158.

Operating profit amounted to MSEK 69 (158) and the operating margin to 1.9% (4.3%). Acquired units had a positive effect on operating profit of MSEK 24.

Excluding non-recurring items of MSEK 58, operating profit amounted to MSEK 127 (179) and operating margin to 3.4% (4.9).

Profit after tax for the period totalled MSEK 22 (77).

Earnings per share were SEK 0.26 (1.02).


Market Development Continued strong development in Asia, especially India Good development in South Africa, Canada and Brazil during Q3 In Europe, development has been good in France, the

Netherlands, Denmark and Belgium Weaker development on other markets in Europe

Order intake and sales for the full period: +6%*

Profit analysisDuring the third quarter, acquired operations made a positive contribution of some MSEK 19 to the quarter’s operating profit. Furthermore, the weak development on markets in Europe and Africa was compensated by the strong development of operating profit on other markets.

% of Group sales: 44%

Business Area Bank Security & Cash Handling

MSEK 2012 2011 2012 2011 2011 2010

Order intake 513 525 1,718 1,661 2,215 2,477

Net sales 602 534 1,652 1,586 2,276 2,427

Operating profit/loss excl. non-recurring items 46 28 92 86 167 199

Operating margin excl. non-recurring items, % 7.6 5.2 5.6 5.4 7.3 8.2

Non-recurring items -4.0 -1.0 -4.0 -3.0 -20.0 -33.0

Operating profit/loss 42 27 88 83 147 166

July-Sept Full year Jan-Sept

* Growth in constant currency rates


8 August: Gunnebo Acquires Hamilton Safe

Why has Gunnebo acquired Hamilton Safe? A quality company and a profitable business –

will improve Gunnebo’s overall EBIT

Perfect strategic fit Product portfolio (UL-graded/rated) Customers: Bank and Government Covers up a ”white spot” on the map for Gunnebo

Solid platform for expansion of selected Gunnebo solutions into the US

Profitable business with opportunityto introduce Gunnebo solutions

into the US market!


Hamilton Safe Companies: Background

Started manufacturing of bank security equipment in 1967

Based in Cincinnati, Ohio, USA

Majority of sales made in the US and Canada

7 business units of which5 production facilities

Sales through a +80dealer network


Company Overview

Banking, 70% of sales

Government etc., 30% of sales

Annual sales: MUSD 70 (2011)

Employees: 220

Profitability: Well above Group targets


Market Development Good development of order intake and net sales

Order intake for the full period: +9%* Net sales for the full period: +11%*

Strong growth in Asia – distributor based sales Good development in UK, France, Belgium, Spain Weaker development on other markets, especially during Q3

Profit analysisBoth operating profit and the operating margin strengthened during the year, mainly due to a more favourable market and product mix


Business Area Secure Storage

MSEK 2012 2011 2012 2011 2011 2010

Order intake 182 199 589 545 736 748

Net sales 196 196 581 531 731 750



Non-recurring items 0.0 0.0 0.0 0.0 -1.0 -10.0


Full year July-Sept Jan-Sept



Market Development Good development of order intake during the full period

Order intake for the full period: +3%* Sales of contract-based service continue to increase Markets in Asia, Americas, UK and Italy has developed

very well

Profit analysisOperating margin for the full period is lower than the same period last year. During the third quarter, operating profit has also been burdened by costs for making the service delivery process more efficient.


Business Area Global Services

MSEK 2012 2011 2012 2011 2011 2010

Order intake 192 208 914 899 1,144 1,120

Net sales 271 272 841 819 1,120 1,120



Non-recurring items -6.0 0.0 -6.0 0.0 -17.0 -16.0


Jan-Sept Full year July-Sept



Market Development Order intake has strengthened throughout the year

Order intake Q3: Unchanged* Order intake full period: -6%*

Good development in China, Germany, Middle East, Americas and Eastern Europe

Profit analysisThe result during the quarter is in line with that of the previous year. It has been negatively impacted by MSEK 22 related to an arbitration award, whereby Gunnebo was ordered to pay compensation to a former commercial agent, as well as by MSEK 5 related to costs for moving of operations.


Business Area Entrance Control

MSEK 2012 2011 2012 2011 2011 2010

Order intake 163 173 502 538 713 654

Net sales 158 180 466 511 720 691



Non-recurring items -27.0 0.0 -28.0 0.0 -15.0 -36.0

Operating profit/loss -18 10 -17 26 36 -1

July-Sept Full year Jan-Sept

* Development in constant currency rates


SafePay Good order intake on the Northern European markets,

weaker in Southern Europe. In Q3 order intake has been weak in general due to postponed investment decisions

Operating profit/loss continues to be affected by market investments and continued work on quality improvements

Gateway Stable development of order intake in Q3. This is mainly

explained by the prevailing economic uncertainty on several large markets in Europe, which has resulted in a lower rate of investment in the retail sector.

The full period’s lower operating profit is explained by lower sales volumes and negative currency effects.


Developing Businesses

MSEK 2012 2011 2012 2011 2011 2010

Order intake 34 70 210 225 283 272

Net sales 53 65 179 198 290 275

Operating profit/loss excl. non-recurring items -13 -3 -38 -26 -35 -32

Operating margin excl. non-recurring items, % -24.5 -4.6 -21.2 -13.1 -12.1 -11.6

Non-recurring items 0.0 0.0 0.0 0.0 0.0 -5.0

Operating profit/loss -13 -3 -38 -26 -35 -37

July-Sept Jan-Sept Full year


MSEK 2012 2011 2012 2011 2011 2010

Net sales 1,280 1,247 3,719 3,645 5,137 5,263

Cost of goods sold -900 -875 -2,614 -2,546 -3,572 -3,723

Gross profit 380 372 1,105 1,099 1,565 1,540

Other operating costs, net -363 -311 -1,036 -941 -1,241 -1,343


Net financial items -6 -5 -14 -19 -26 -75

Profit/loss after financial items 11 56 55 139 298 122

Taxes -10 -17 -33 -49 -52 -41

Profit/loss for the period from continuing operations 1 39 22 90 246 81

Profit/loss for the period from discontinued operations - 5 - -13 -16 97

Profit/loss for the period 1 44 22 77 230 178

Whereof attributable to:

Parent company shareholders -1 44 20 77 228 178

Holdings without controlling influence 2 - 2 - 2 -

1 44 22 77 230 178

Summary group income statement July-Sept Full year Jan-Sept


MSEK 2012 2011 2011 2010

Goodwill 1,365 997 1,104 952

Other intangible assets 97 89 111 96

Property, plant and equipment 312 298 316 367

Financial assets 124 191 139 94

Deferred tax assets 258 267 253 241

Inventories 629 591 564 543

Current receivables 1,203 1,203 1,239 1,253

Liquid funds 263 214 239 189

Total assets 4,251 3,850 3,965 3,735

Equity 1,665 1,630 1,776 1,606

Long-term liabilities 1,249 788 800 639

Current liabilities 1,337 1,432 1,389 1,490

Total equity and liabilities 4,251 3,850 3,965 3,735

Summary group balance sheet 31 December 30 September


Loan Frame: September 2012

During the third quarter Gunnebo agreed on 18 months of acquisition financing in the form of a new credit framework amounting to MUSD 35, with the aim of part-funding the acquisition of Hamilton Safe.

Furthermore, the Group extended its former borrowing facility by 12 months up to and including June 2015.

The Group’s guaranteed credit framework amounted to MSEK 1,428 on September 30, 2012.


Group Liquid Funds and Financial Position

The Group’s liquid funds at the end of the period amounted to MSEK 263 (214)

Equity totalled MSEK 1,665 (1,630), giving an equity ratio of 39% (42)

Net debt amounted to MSEK 955 (501). Excluding pension commitments it amounted to MSEK 763 (196).

Debt/equity ratio amounted to 0.6 (0.3)


Equity Ratio


Return On Capital Employed


Gunnebo’s Strategic Focus

Entrance ControlSecure Storage Global ServicesBank Security & Cash Handling

Pioneering fire and burglary protection

State-of-the-art control over the flow of people

Innovation along the whole cash chain

Services which deliver performance


Phase 5: Delivery!

Phase 1 1995 – 2005 > 40 acquisitions Growth and entrepreneurship

Phase 2 2006 – 2008 Consolidation

Phase 3 2009 – 2010 Get It Right! Focus on BUSINESS

Phase 4 2011 – 2012 Strategy execution

Phase 5: Delivery 2013 –


The Route to Phase 5: Delivering

Cost ReductionsRationalisations, LCM

Business Development

Acquisitions

Market-DrivenProduct Development

2009 EBIT Margin

3%

Focused Business

GeographicalExpansion

2014 EBIT Margin

> 7%


Key Success Factors Going Forward

Management Drive, support and control Don’t compromise on people

Execution, execution, execution

Move point of gravity from Europe to Asia/Africa/ME/Americas Boost growth opportunities Business development Allocate resources Increase LCM and sourcing

Growth Acquisitions Strengthen core business Geographical expansion Services


Gunnebo General Assumptions 2013: Delivery

Unstable situation, still uncertainties: political and governmental problems have been known for some time… and crises seems to spread to new countries.

The global economy will continue to expand, though risks from Europe and the Persian Gulf could slow expansion considerably. IMF predicts 3.5% growth in world GDP this year, 4.1% next year. Both years have been revised upward since the autumn 2011 forecast.

Asia will grow, especially the emerging countries (which include China, India and Indonesia). The advanced economies (the largest of which are Japan and Australia) are expected to grow moderately.

The Group is now well positioned in Americas and there is increased business confidence in the US, however uncertainty and election hangover in play.

Huge negative impact on several European markets. Will ECB and the Eurozone build market confidence or will the South European virus spread north?

Still a “mixed bag” and the European markets are in different shape. Opportunities will occur and focus, flexibility and strength will be a winning concept.


Financial Calendar

Year-end release January 30, 2013

Annual General Meeting 2013 April 9, 2013

Interim Report January-March 2013 April 25, 2013

Interim Report January-June 2013 July 17, 2013

Interim Report January-September 2013 October 24, 2013

Financial Calendar


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ceo comments · gunnebo interim report january-september 2012 25 october 2012, page 2 ... general...

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