Annual Report Loomis Annual Report 2012 Annual 2012 Loomis is the specialist at managing its customers’ flow of cash, allowing the customers to focus on their own operations. Loomis AB, Gamla Brogatan 36–38, 2 nd floor, PO Box 702, SE-101 33 Stockholm, Sweden Switchboard: +46 8 522 920 00, www.loomis.com Contents The year in review 1 Group overview 2 President’s statement 4 Vision, goals and strategy 6 Operations 10 The future 14 Market 16 Europe 18 2 USA 20 Values and Code of Conduct 22 Group overview Risk management 25 » Loomis is one of the Corporate Governance Report world’s three largest cash Corporate Governance 26 handling companies. « The Board of Directors’ Report on Internal Control and Risk Management 30 Board of Directors and Auditor 34 Group Management 35 The share 36 Financial statements Administration report 38 4 Consolidated statement of income 43 President’s Consolidated balance sheet 44 Consolidated statement of statement changes in equity 45 » ­In the past year we took Consolidated statement of cash flows 46 a significant step forward Notes – Group 47 toward realizing our most Parent Company statement of income 82 important financial goal Parent Company balance sheet 83 Parent Company statement of cash flows 84 of an operating margin Parent Company statement of of 10 percent. « changes in equity 85 Notes – Parent Company 86 Auditor’s report 94 Five year overview 95 Quarterly data 97 Notice of Annual General Meeting 99 Addresses 100 10 Operations » Loomis’ most This is a translation of the original Swedish Annual important mission Report. In the event of differences between the English translation and the Swedish original, is to manage the the Swedish Annual Report shall prevail. flow of cash in society securely Information regarding the size and position of the and efficiently. « market, as well as other general market data, is based on Loomis’ experience and assessment, supported by both internal and external studies, unless stated otherwise. The year in review 1 Events in 2012 Increased demand for Loomis SafePoint® Loomis in the USA has signed numerous important contracts for the Loomis Safe- Point® comprehensive solution. The number of Loomis SafePoint® units installed grew by 55 percent to over 8,000 units by the end of the year. Acquisition in Spain After the acquisition of the Spanish company Efectivox, with its 500 employees and approximately 70 cash in transit vehicles, Loomis is able to offer cash handling services throughout the entire Spanish mainland. Expansion into Latin America Loomis acquired the Argentinean cash handling company Vigencia. This acquisi- tion, which is Loomis’ first outside Europe and the USA, marks the beginning of a broader expansion in Latin America. Strong position in Sweden In 2012 Loomis strengthened its leading position as the specialist in cash handling in Sweden by signing several new contracts, partly due to changes in the Swedish cash handling sector. This has resulted in an increase of more than SEK 200 million in annual order value for Loomis. 9.0 % Continued focus on ethics and values During the year Loomis continued to focus on the Group’s values and Code of Con- duct. One example of this is a company game called Loomis Good Decision Game The operating margin (EBITA) which focuses in particular on ethical issues that can arise in everyday situations in increased to 9.0 percent (8.3) the workplace. Increased profitability Thanks to Loomis’ ongoing efficiency improvements, the number of profitable branches has increased from 75 to 77 percent. Loomis’ operating margin has im- proved in each quarter compared to the corresponding quarter the previous year. 4.50 SEK Cash management continues to grow Cash management revenue as a percentage of Loomis’ overall revenue continued to grow in 2012, partly as a result of increased demand for comprehensive solutions The proposed dividend for 2013 is such as Loomis SafePoint®. Cash Management Services, which has higher profit- SEK 4.50 (3.75) per share ability than Cash in Transit, accounted for 30 percent of revenue in 2012. GROUP KEY RATIOS REVENUE AND OPERATING MARGIN (EBITA) FOR THE GROUP 2010–2012 2012 2011 2010 SEKm % Revenue, SEK m 11,360 10,973 11,033 15,000 10 Revenue, Europe, SEK m 6,955 6,934 7,024 8 Revenue, USA, SEK m 4,405 4,039 4,009 12,000 Operating income (EBITA), SEK m 1,019 912 882 9,000 6 Operating margin, % 9.0 8.3 8.0 Operating income (EBIT), SEK m 988 805 866 6,000 4 Dividend per share, SEK 4.501) 3.75 3.50 Earnings per share before dilution, SEK 8.90 7.03 6.80 3,000 2 Cash flow from operating activities as a % of 84 77 106 operating income (EBITA) Average number of full-time employees 19,448 19,511 18,466 2010 2011 2012 1) Dividend proposed to the Annual General Meeting 2013. Revenue for the Group Operating margin for the Group Koncernens rörelsemarginal Koncernens intäkter 2 Group overview This is Loomis Loomis is one of the world’s three largest cash handling companies and the only inter­ national player to specialize in cash handling. Loomis has operations in 16 countries. Loomis provides cash in transit and cash management services that reduce customer costs and improve cash handling security. Loomis works with a broad range of customers, from central banks and large commercial banks to ATM operators, large retail and restaurant chains and smaller retail outlets. Loomis’ goal is to be one of the two largest players in each geographical market where the Group has operations. This goal has already been reached in most cases. Every day … Loomis makes 100,000 visits to customers … Loomis handles 50 million bills at more than 250 cash centers … Loomis transports and processes cash in the amount of SEK 75 billion … Loomis is responsible for managing 90,000 ATMs Loomis’ service lines SHARE OF REVENUE BY SERVICE Cash in Transit (CIT) LINE 2012 EUROPE Loomis’ fleet of just over 6,500 cash in transit vehicles transport SEK 75 billion in cash daily to and from stores, banks and ATMs. 34% 66% Loomis optimizes routes to maximize the number of stops per route and has well-established routines and state of the art equip- ment for the highest possible level of security. CIT accounts for approximately 70 percent of Loomis’ revenue. Cash Management Services (CMS) SHARE OF REVENUE BY SERVICE LINE 2012 USA In every 24-hour period Loomis handles bills and coins at approxi- mately 250 cash centers belonging to the Group where cash can 24% 76% also be stored on behalf of customers. Efficient work procedures and modern equipment provide economies of scale in counting, packaging and authenticity verification. Loomis also provides services for analysis, planning and reporting of customer flow of cash, as well as industry-adapted comprehensive solutions for retailers. CMS accounts for approximately 30 percent of Loomis’ revenue. Cash in Transit Cash Management Services Group overview 3 20,000 400 16 employees at… branches in… countries. EUROPE: Austria, Czech Republic, Denmark, Finland, France, Norway, Portugal, Slovakia, Slovenia, Spain, Sweden, Switzerland, Turkey and the UK. NORTH AMERICA: USA SOUTH AMERICA: Argentina 2012 Loomis expands into Latin America with an acquisition in Argentina and covers the 2011 Loomis ex- entire Spanish mainland pands into Turkey with the acquisition of and becomes the mar- Efectivox. ket leader in the American market with the acquisition of Pendum in the USA. Henry Wells and William Far- 1852 go establish Wells Loomis ex- Fargo & Co, which later pands into the becomes Wells Fargo Ar- 2010 Czech Republic with mored Services, during the Cali- the acquisition of the fornian Gold Rush. A few years lat- Czech cash handling compa- er they take over parts of the leg- ny Fenix with its 500 employ- endary Pony Express, the first ees. fast mail service in North Amer- ica. Loomis’ history Loomis was listed on the stock exchange as an indepen- During the Alaskan Gold Loomis establishes a sub- dent company in 2008 but the company’s 160-year history Rush Lee Loomis forms the sidiary in Slovakia and ac- started with the American Gold Rush. This is a summary of Cleary Creek Commercial quires the Slovakian cash Company which later be- handling company Fenix. the most important milestones in Loomis’ development, from comes Loomis Armored Car 1905 Service. The company pro- 2009 a horse-drawn postal service to today’s international group vides Alaska’s miners with of companies offering cash handling services. supplies using dogsleds. Loomis is listed on Nasdaq Erik Philip-Sörensen es- OMX Stockholm. tablishes Helsingsborgs Nattvakt in Helsingborg, Sweden. The company ex- 2008 pands internationally and be- comes Securitas. Securitas Cash Handling Services changes its name Loomis Armored Car Ser- to Loomis. 1934 Loomis, Fargo & Co. vice acquires Wells Fargo merges with the Securitas Armored and forms Loomis, Group. Fargo & Co. 2006 1997 2001 4 President’s statement On a steady course! 2012 was a challenging year in many countries and for many industries. From Loomis’ perspective it is clear that we have a robust business concept that has once again been proven to be sound. Our business concept provides stable revenue flows despite of the state of the economy and irrespective of the fact that our primary customer markets – banks and retailers – experienced a particularly tough climate over the past year. In the past year we took a significant step forward toward real- ment to safety among all of our employees. In 2012 we had the izing our most important financial goal of an operating margin lowest cost of risk to date. of 10 percent by 2014 at the latest.