gunnebo interim report january-september 2013
DESCRIPTION
Summary of Gunnebo's Interim Report for January-September 2013TRANSCRIPT
nterim Report January-September 2013elephone Conference October 24, 2013
The quarter has developed well and order intake grew organically by 10%. Asia-Pacific continued to show excellent growth,
organically it increased by 45%. Americas grew organically by 8%. Markets in Europe generally remained unstable and
showed no signs of an actual recovery. Focus on adapting costs in Europe has produced
good results. Focus to move gravity to growth markets and
adjust cost-structure in Europe continuing, contributed to improved margins during the quarter. In the third quarter business outside of Europe
accounted for 42% of net sales. SafePay & EAS on the right track. Moving point of gravity and cost reductions in
Europe will continue. Operating margin amounted to 7.1% in the
quarter.
CEO Comments
8 October 2013, page 3
During the quarter, a number of orders that are fully in line with the Group’s strategy were received:
Brazil: breakthrough in the CIT customer segment with an order for cash handling solutions.
Korea: a major order from Samsung for entrance control.
Belgium: an important order for solutions to tighten security at airport check-in from TUI Airlines
Germany: a major retail chain is continuing to streamline cash handling in its stores with equipment from Gunnebo
Spain: Bankia has commissioned Gunnebo to upgrade security in its branch network in line with new legal requirements.
CEO Comments
8 October 2013, page 4
Platform In South Korea Acquired
ATG Entrance Corporation, distributor of Gunnebo turnstile product range into the South Korean market, acquired July 5
Annual turnover of some 4 MEUR and 13 employees in its sales office in Seoul
Solid customer base with leading South Korean corporations as LG, Samsung, Hyundai and the government of South Korea
Holds a market leading position on the South Korean market for turnstiles
“The acquisition of ATG Entrance Corporation is very much in line with Gunnebo’s strategic agenda to move the point of gravity to markets outside Europe. ATG is the South Korean market leader in turnstiles with a strong existing customer base. We also see ATG as a good platform to introduce other offerings from Gunnebo into the South Korean market as well as to surrounding countries.”
8 October 2013, page 5
Gunnebo Extends Reach in Southeast Asia
New offices opened in Bangkok, Thailand and in Yangon in the Republic of Myanmar
"We expect a lot of development in the security sector in Thailand, mainly as a result of increasing wealth and improvements being made to the infrastructure. Our extended service offering here will allow us to better meet emerging customer needs.”
“The second new site, a branch office of Gunnebo Singapore, is located in Yangon, Myanmar and will give Gunnebo direct access to the local market. By expanding our presence in Southeast Asia, Gunnebo continues to take advantage of the growing opportunities in the region.”
8 October 2013, page 6
Third Quarter 2013
Order intake increased to MSEK 1,248 (1,084), organically it increased by 10%. Acquired units contributed MSEK 60.
Net sales increased to MSEK 1,314 (1,280), organically they increased by 3%. Acquired units contributed MSEK 36.
Operating profit increased to MSEK 61 (17) and the operating margin to 4.6% (1.3%). Acquired units had a positive effect on operating profit of MSEK 7.
Operating profit excluding expenses of a non-recurring nature of MSEK -32 (-46) increased the operating profit to MSEK 93 (63) and the operating margin to 7.1% (4.9%).
Profit after tax for the period totalled MSEK 32 (1). Earnings per share were SEK 0.39 (-0.02).
8 October 2013, page 7
January-September 2013
Order intake increased to MSEK 4,201 (3,933), organically it increased by 4%. Acquired units contributed MSEK 262.
Net sales increased to MSEK 3,794 (3,719), organically they increased by 1%. Acquired units contributed MSEK 208.
Operating profit increased to MSEK 119 (69) and the operating margin to 3.1% (1.9%). Acquired units had a positive effect on operating profit of MSEK 32.
Operating profit excluding expenses of a non-recurring nature of MSEK -54 (-58) increased the operating profit to MSEK 173 (127) and the operating margin to 4.5% (3.4%).
Profit after tax for the period totalled MSEK 54 (22). Earnings per share were SEK 0.69 (0.26).
8 October 2013, page 8
Market Development Good development of US Hamilton Safe Good development in India & Australia Weaker development in Europe, Africa & Middle East,
especially within the banking sector
Profit analysisImplemented cost reductions could not fully offset the weaker sales development in Europe.
Market initiatives to launch concept solutions in cash handling have continued and have incurred some initial costs.
% of Group sales: 46%
Business Area Bank Security & Cash HandlingFull year
MSEK 2013 2012 2013 2012 2012
Order intake 625 513 1,954 1,718 2,374Net sales 617 602 1,739 1,652 2,386Operating profit/loss excl. non-recurring items 45 46 79 92 158Operating margin excl. non-recurring items, % 7.3 7.6 4.5 5.6 6.6Non-recurring items -9 -4 -21 -4 -13Operating profit/loss 36 42 58 88 145
July-Sept Jan-Sept
8 October 2013, page 9
Market Development Strong order intake from global manufacturers
of ATMs, especially in India Overall stable development of order intake Good development from newly established sales
company in MalaysiaProfit analysisThe increase in profit during the period can be explained by an increased focus on cost efficiency in the production and distribution of standard products.
% of Group sales: 15%
Business Area Secure StorageFull year
MSEK 2013 2012 2013 2012 2012
Order intake 164 182 574 589 801Net sales 189 196 577 581 781Operating profit/loss excl. non-recurring items 9 4 30 17 30Operating margin excl. non-recurring items, % 4.8 2.0 5.2 2.9 3.8Non-recurring items -1 - -3 - -11Operating profit/loss 8 4 27 17 19
July-Sept Jan-Sept
8 October 2013, page 10
Market Development Stable development of order intake Good development in Brazil supporting weaker
development in Europe Further improved customer service in Australia,
US and Netherlands due to establishment ofservice-centers
Profit analysisThe operating profit and operating margin, adjusted for one-off items, have improved thanks to increased efficiency in our service deliveries, partly due to a change in the distribution between outsourced and in-house services on a number ofmarkets.
% of Group sales: 22%
Business Area Global ServicesFull year
MSEK 2013 2012 2013 2012 2012
Order intake 201 192 903 914 1,138Net sales 276 271 818 841 1,143Operating profit/loss excl. non-recurring items 35 26 83 73 110Operating margin excl. non-recurring items, % 12.7 9.6 10.1 8.7 9.6Non-recurring items -19 -6 -24 -6 -9Operating profit/loss 16 20 59 67 101
Jan-Sept July-Sept
8 October 2013, page 11
Market Development Good development of order intake Good growth in region Asia-Pacific and in the
Middle East Weaker development in Europe
Profit analysisThe Business Area’s margins have improved thanks to the relocation of assembly to China. Last year’s results included expenses of a non-recurring nature for compensation to a commercial agent following arbitration.
% of Group sales: 12%
Business Area Entrance ControlFull year
MSEK 2013 2012 2013 2012 2012
Order intake 202 163 546 502 674Net sales 164 158 454 466 663Operating profit/loss excl. non-recurring items 10 9 17 11 47Operating margin excl. non-recurring items, % 6.1 5.7 3.7 2.4 7.1Non-recurring items -1 -27 -3 -28 -33Operating profit/loss 9 -18 14 -17 14
Jan-Sept July-Sept
8 October 2013, page 12
SafePay SafePay also showed an improvement in profit
during the third quarter.
A seasonally strong sales quarter coupled with a continued focus on costs and product quality in close collaboration with our customers.
Gateway Increased demand for electronic article surveillance
and consumables such as tags and labels resulted in a good quarter in terms of sales.
An improved gross margin and focus on cost savings have helped reverse the profit trend.
% of Group sales: 5%
Developing BusinessesFull year
MSEK 2013 2012 2013 2012 2012
Order intake 56 34 224 210 263Net sales 68 53 206 179 263Operating profit/loss excl. non-recurring items 2 -13 -9 -38 -42Operating margin excl. non-recurring items, % 2.9 -24.5 -4.4 -21.2 -16.0Non-recurring items -1 - -1 - -1Operating profit/loss 1 -13 -10 -38 -43
July-Sept Jan-Sept
8 October 2013, page 13
Gunnebo Global Market Trends January-September 2013
Asia-Pacific
Americas
Europe, Middle East & Africa
North Europe
South Europe
France
Africa & Middle East
8 October 2013, page 14
FINANCIALSChristian Johansson
CFO
8 October 2013, page 15
Full yearMSEK 2013 2012 2013 2012 2012
Net sales 1 314 1 280 3 794 3 719 5 236
Cost of goods sold -908 -900 -2 653 -2 614 -3 666
Gross profit 406 380 1 141 1 105 1 570
Other operating costs, net -345 -363 -1 022 -1 036 -1 391
Operating profit/loss 61 17 119 69 179
Net financial items -8 -6 -24 -14 -66
Profit/loss after financial items 53 11 95 55 113
Taxes -21 -10 -41 -33 -89
Profit/loss for the period 32 1 54 22 24
Gross margin, % 30,9 29,7 30,1 29,7 30,0Operating margin, % 4,6 1,3 3,1 1,9 3,4
Operating profit excl. non-recurring items, MSEK 93 63 173 127 266
Operating profit excl. non-recurring items, % 7,1 4,9 4,5 3,4 5,1Earnings per share, SEK 0,39 -0,02 0,69 0,26 0,26
Summary Group income statement July-Sept Jan-Sept
8 October 2013, page 16
Good News in Q3
Improved margins related to increased sales outside Europe
Some price and mix effects inspite of soft markets
Developing Business (SafePay & EAS) Sales Gross margin improvements Overhead cost reduction
Efficiency increase in Global Services
Cost reductions in Europe
Operations Direct material Assembly in China
8 October 2013, page 17
Operating Cash Flow
4 Quarters Aggregated
MSEK
8 October 2013, page 18
Group Liquid Funds and Financial Position
The Group’s liquid funds at the end of the period amounted to MSEK 317 (350*)
Equity totalled MSEK 1,416 (1,533*), giving an equity ratio of 33% (36*).
Net debt amounted to MSEK 1,179 (1,026*). Excluding pension commitments it amounted to MSEK 817 (684*).
Debt/equity ratio amounted to 0.8 (0.7*).
*at the beginning of the year
8 October 2013, page 19
Gunnebo’s Key Priorities 2013
Growth
Gross Margin Improvements
Fixed Cost Savings in Europe
SafePay
Hamilton Safe
8 October 2013, page 20
Financial Calendar
Year-end release 2013 January 31, 2014Gunnebo CMD 2014 March 5, 2014AGM 2014 April 10, 2014Interim report January-March 2014 April 29, 2014
Financial Calendar
8 October 2013, page 21
Q&A
8 October 2013, page 22
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