2 0 1 Annual Report Contents About Loomis 1 President’s statement 2 Loomis’ operations 8 Loomis’ services 11 Strategy 12 Financial targets 14 The Loomis Model 18 Business environment 20 Segment Europe 26 Segment USA 28 Segment International 30 Employees 35 Sustainability 38 Risk management 42 The share 44 CORPORATE GOVERNANCE REPORT Corporate governance 46 Board of Directors 54 Group Management 56 FINANCIAL STATEMENTS Administration Report 59 Consolidated statement of income 64 Consolidated balance sheet 65 Consolidated statement of cash fl ows 66 Consolidated statement of changes in equity 67 Notes – Group 68 Parent Company statement of income 104 Parent Company balance sheet 105 Parent Company statement of cash fl ows 106 Parent Company statement of changes in equity 107 Notes – Parent Company 108 Auditor’s Report 115 Five-year overview 120 Notice of Annual General Meeting 122 Calendar 2018 The 2018 Annual General Meeting will take place at 5 p.m. CEST on Thursday, May 3, 2018 at City Confer- ence Centre, Stockholm. Read more on page 122. Interim Report Jan – March May 3 Interim Report Jan – June July 25 Interim Report Jan – Sept November 2 Unless otherwise specifi ed, Loomis’ internal investigations and studies have been used. This is a translation of the original Swedish Annual Report. In the event of differences between the English translation and the Swedish original, the Swedish Annual Report shall prevail. About Loomis operations Cash in Transit Loomis transports cash to and from stores, banks and automatic teller machines (ATMs). Loomis collects daily receipts, supplies retail customers and banks with cash and foreign currency, and replenishes ATMs. Cash Management Services Daily receipts and cash from retailers, bank branches and ATMs are normally transported to one of Loomis’ cash centers where Loomis, using efficient processes and state-of-the-art equipment, counts, quality assures and packages bank notes and coins. International Services Loomis provides cross-border transportation and management and storage of cash, precious metals and other valuables. SafePoint SafePoint is a comprehensive solution developed by Loomis for retailers. The customer deposits receipts on an ongoing basis in the secure SafePoint unit where it is registered and safely stored in the store. The custom- er’s bank account is credited no later than the the day after the cash is deposited in the SafePoint unit. This improves the customer’s liquidity and cash flow. About Loomis 2017 numbers 12.1% 14 % 9 SEK Operating margin Earnings per share The Board is pro- (EBITA) increased improved by 14% posing a dividend of by 12.1% (11.2%) to SEK 18.99. SEK 9.00 per share for 2017 (SEK 8) Acqui- Cobelguard in Belgium Intermarketing OY Wagner in Chile sitions in Finland during In January Loomis ac- In September Loomis AB In December Loomis the year quired all of the shares in acquired all of the shares in acquired all of the shares in Cobelguard CIT NV which Intermarketing Oy. The com- a wholly owned subsidiary operates a domestic cash pany is a market leader in Wagner Seguridad Custodia handling business. The ac- solutions for cash recyclers y Transporte de Valores quisition strengthens Loomis’ and offers both bank and (Wagner) in Chile, which presence in Europe and in- retail customers compre- operates a national cash creases the potential to take hensive solutions for cash handling business. The ac- advantage of the accelerated depositing and recycling. quisition increases Loomis’ outsourcing trend in Belgium. presence in the fast-growing Latin American market. 160-year 1852 1905 1925 history Wells Fargo & Co is Lee Loomis starts The Loomis Armored established during the a company that uses Car Service is formed California Gold Rush. dogsleds to provide and is the fi rst to use Later the company Alaska’s miners with an armored vehicle becomes co-owner supplies. to transport cash. The of the legendary Pony company expands for Express – the fi rst many years in Western express mail service USA and Canada. in North America. 1 President’s 2017 was another successful year for statement Loomis. We achieved all of our fi nancial targets for the third year out of three. Financial performance OPERATING MARGIN REVENUE 2013–2017, SEK BILLION (EBITA) 2013–2017, % NET DEBT/EBITDA 2013–2017, % ANNUAL DIVIDEND 2013–2017, SEK 20 14 3.0 12 90 16 12 2.0 8 60 12 10 8 1.0 4 30 8 4 0 6 0.0 0 0 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017* Dividend per share Dividend per share as of percent of earnings per share * Dividend proposal for the 2018 Annual General Meeting. 2008 2011–2012 2014 2016 On December 9 Loomis acquires Loomis acquires VIA A new strategy and Loomis is listed on Pendum in the USA MAT and expands its updated fi nancial targets Nasdaq Stockholm. and becomes the US service offering to include were established for the market leader. Loomis international valuables period up to 2021. Loomis expands into South logistics. The acquisition acquired three businesses America through the also makes Loomis the – Cobelguard CIT NV in acquisition of the market leader in this Belgium, Intermarketing Argentine company segment in the Swiss Oy in Finland and Wagner Vigencia. market. Seguridad Custodia y Transporte de Valores in Chile. !"#$%$&'$(")*(+,(+-#$".//&01!"2#$3%/$&&"$'$44(")"*5($+6,(,2+4-#"$#"/.44//&$(0'!/"16#"-2$2$%"73$-/2&&3'"$$(44"8)*$"(52+$9,(6(+0,2-#4-$#""#".:///&94414$0/(!1#'"/"0#62-$-$"2%;3"7</$&(-&2-"33'$$1$44=(("/")(8"*45$($+$2",69#(+,$(20-"4##"$-##"/."//&44:91$40('/1/#6"02-2$-"3;7"/-<&2(3-"3$$144(="8/"($542$96"#(,02$4#"-"##"/:4491$4(/'#/60--2"";"7<-(2-3$1=("/8(4$$2"9#($0"#-#":914/#0-";"<(-31=/(4$"#$" >-6/($1"0:"506$"1/&"'$#(0+$("3>--460//(3$$16"06:""5+06,(#$"$15/&-3"4'$$#(0(032+?$"(@">3-$6-43/0(/$/&31"$"0)6*:"56(+"06+,(,+($"#$1$4/"&59-"34'$4*#$A(-0("+3.2$//?(&">3@0--614$"/031(/$/03&13$""60)3:6*"5,"(06+,-(($#+/"1"$=/54&B"-"39"'4$$*#(A(00-3(+"2.$?//(""@&3-0$4130"/1&30$3"6)"*63(",+(++,,((-+#($/$"45="-B93"44*$A(0-(3"2.//?"&@0$1"31/0&3"")3*(,(++,(-(+/$"=4"B9"4*A-(".//&01"103"3,(+-(/"=B" 2 President’s statement Loomis Annual Report 2017 New successes, new targets 2017 was another successful year for Loomis. We can also pat ourselves on the back because we reached all of the targets we had set for the period ending in 2017. This means that Loomis is three for three in reaching financial targets since the Company’s stock exchange listing in 2008. Now we’re recharging our batteries and aiming even higher. At the end of September 2017 Loomis presented an updated strategy and new financial targets for the period until the end of 2021. Robust business model margins. The organic growth was 6 percent (11) and the operating Loomis reached all of its financial targets for the third time out of margin reached 13.1 percent (11.5) in 2017. three, and this is confirmation of the sustainability of our business Our strong growth in the USA is quality-driven. We have built an model and of the ability of our Company to adapt to changed cir- increasingly strong position there and gained increased confi- cumstances to create lasting value. dence from players in the market thanks to our I have had the privilege of leading Loomis target-oriented focus on quality over a number for almost two years now and it has often of years. Today I can venture to say that we struck me how truly target-oriented and com- Loomis reaches all of hold an entirely unique position in the US petitive the Company is. We have a flat and its established financial market. Ever-improving quality also increases highly decentralized organizational structure, targets for the third the trust that our customers place in us to take based largely on our 400 or so branches in responsibility for a broader range of cash han- more than 20 markets. They serve as indepen- year out of three dling services. This allows us to drive the dent units with their own performance re- whole market in a positive direction. US banks sponsibility. This enhances the sense of cus- and retailers in general are behind those in tomer focus and commitment, which for us is about listening to Europe in terms of outsourcing cash handling services and there is and understanding our customers’ needs so that we can develop therefore still great potential in this market. our products and services. High quality towards our customers is Over the past year the most important factors behind our fundamental to us and a very important component of our busi- growth and improved results have been increased CMS volumes ness model. The business is run based on the branches’ local cir- and the installation of more SafePoint units. In 2017 we also con- cumstances and conditions. The branches also measure all aspects tinued our efforts to improve efficiency at our US branches, which of their performance in comparison to each other. They compete have further reduced their costs. with and learn from each other to refine the way they operate, cut costs and find new opportunities to grow and earn new money. Launch of SafePoint in Europe This structural model and culture is one of the most significant The countries accounting for the highest growth in Europe are explanations for how Loomis is able to constantly raise quality, Turkey and Argentina (which is included in Segment Europe), al- increase profitability and, not least, reach its financial targets.