Q4 Report 2017 2 February 2018
CEO’s Comments ▪ The implementation of our Profitable Growth Strategy continues Continued work with the strategic review in ▪ France Factory closure in South Africa completed ▪ Prioritisation of product areas to further ▪ strengthen focus on customers and delivery ▪ Weak sales in the quarter Bank sales in India and South Africa ▪ Large Entrance Control order delivered in ▪ quarter four 2016 in Europe ▪ Strong order intake in Q4 ▪ Full year EBIT: 6.2% Page 2 GUNNEBO Q4 REPORT 2017
Fourth Quarter 2017 in Brief 2017 2016 2017 2016 Q4 IN BRIEF Q4 Q4 YTD YTD Net sales, MSEK 1,632 1,776 5,991 6,088 EBITDA excl. items affecting comparability (IAC), MSEK 163 203 486 561 EBITDA margin excl. items affecting comparability (IAC), % 10.0 11.4 8.1 9.2 EBITDA, MSEK 133 173 421 489 EBITDA margin, % 8.1 9.7 7.0 8.0 Operating profit (EBIT) excl. items affecting comparability (IAC), MSEK 134 172 369 438 Operating margin (EBIT) excl. items affecting comparability (IAC), % 8.2 9.7 6.2 7.2 Operating profit (EBIT), MSEK 104 142 304 366 Operating margin (EBIT), % 6.4 8.0 5.1 6.0 Net profit for the period, MSEK 76 96 160 209 Basic earnings per share, SEK 0.91 1.25 2.00 2.71 Free cash flow, MSEK 71 107 -74 159 Dividend per share (*proposed), SEK - - 1.20* 1.20 Page 3 GUNNEBO Q4 REPORT 2017
Net Sales, MSEK Sales by Product Area, YTD Page 4 GUNNEBO Q4 REPORT 2017
Organic Sales Growth by Quarter Page 5 GUNNEBO Q4 REPORT 2017
Sales Growth by Quarter and YTD by Region SALES VS LAST YEAR (QTD) SALES VS LAST YEAR (YTD) Organic Structure Currency Total Organic Structure Currency Total EMEA -6% 0% 0% -6% EMEA -3% 0% 1% -2% APAC -9% 0% -4% -13% APAC -4% 0% 1% -3% AMERICAS -3% 0% -6% -9% AMERICAS 1% 0% 1% 2% TOTAL -6% 0% -2% -8% TOTAL -3% 0% 1% -2% Page 6 GUNNEBO Q4 REPORT 2017
Organic Sales Growth Development by Region Q4 2017 vs Q4 2016 Americas EMEA Asia-Pacific Sales: -6% Sales: -9% Sales: -3% Group Sales: -6% Page 7 GUNNEBO Q4 REPORT 2017
Gunnebo’s Product Areas and % of Sales Full Year 2017 19% 18% 23% 33% 7% Electronic Cash Management Entrance Security Other Safes & Vaults Security ▪ Deposit & recycling ▪ Fire safety ▪ Entrance control ▪ Safes ▪ Access control products and ▪ Closed cash ▪ Security doors & ▪ Vaults & vault services ▪ Intrusion detection management partitions doors ▪ Other traded ▪ Electronic locking ▪ Envelope & coin-roll ▪ Electronic article ▪ Safe deposit products and systems surveillance lockers ▪ Remote monitoring services ▪ Application & ▪ Services ▪ ATM safes ▪ Services monitoring software ▪ Services ▪ Services Page 8 GUNNEBO Q4 REPORT 2017
Product Area Cash Management 19% Sales by Region of Group Sales FY 2017 Continued good sales ▪ development in the quarter Growth area – has continued to ▪ strengthen the offering and competence throughout the year Cash Management Gunnebo’s cash management ▪ solutions will optimise cash ▪ Deposit & recycling EMEA, 67% processing at one of the first ▪ Closed cash drive-in cinemas in Australia APAC, 8% management ▪ Envelope & coin-roll Americas, 25% Renewed multi-year service ▪ systems contract signed with Nordic retail ▪ Application & chain, COOP monitoring software ▪ Services Page 9 GUNNEBO Q4 REPORT 2017
Product Area Entrance Security 23% Sales by Region Continued strong sales development in the ▪ FY 2017 quarter of Group Sales Delivery to high-risk site in Australia has ▪ started Breakthrough order to the metro sector in ▪ India Entrance Another growing customer segment is airport. ▪ During the quarter several orders for pre- Security boarding gates were received from customers EMEA, 61% Entrance control ▪ including Munich Airport and Incheon Airport. APAC, 22% Security doors & ▪ partitions In general, good development of sales to ▪ Americas, 17% Electronic article public and commercial buildings ▪ surveillance Services ▪ Page 10 GUNNEBO Q4 REPORT 2017 * Entrance Control
Product Area Safes & Vaults 33% Sales by Region Sales developed slowly in the quarter: ▪ FY 2017 of Group Sales Sales of graded safes and vaults decreased in the ▪ quarter mainly due to continued slow business with banks in several major markets Sales of safes to global manufacturers of ATMs ▪ down from a high level mainly due to lower volumes in India The interest for the automated safe deposit ▪ Safes & locker system, SafeStore Auto, has Vaults continued to be good during the quarter and EMEA, 62% several new orders were received ▪ Safes ▪ Vaults & vault APAC, 23% First order from Pakistan ▪ doors Americas, 15% Solution will be installed at high-end housing estate ▪ ▪ Safe deposit in Shanghai lockers ▪ ATM safes ▪ Services Page 11 GUNNEBO Q4 REPORT 2017
Product Area Electronic Security 18% Sales by Region of Group Sales FY 2017 Sales in the quarter were flat – ▪ important improvement compared to the drop earlier in the year Belgian hospital group, Chirec, equips its ▪ Electronic latest hospital with security solutions from Gunnebo, including electronic Security security, cash management and entrance ▪ Access control EMEA, 78% security ▪ Intrusion detection APAC, 4% ▪ Electronic locking Americas, 18% ▪ Remote monitoring ▪ Services Page 12 GUNNEBO Q4 REPORT 2017
Other - Fire Projects 7% of Group Sales OKI project completed ▪ Other ▪ Fire safety products and services ▪ Other traded products and services Page 13 GUNNEBO Q4 REPORT 2017
Region Europe, Middle East & Africa (EMEA) Q4 2017 1,200 7% Sales decreased organically by 6% ▪ 6% 1,000 Positive development of sales in UK, ▪ 5% 800 South Europe and France 4% 600 3% Strategic review in France continues ▪ 400 2% Local production in South Africa closed ▪ 200 1% Cash Management and Electronic Security showed ▪ 0 0% 1 2 3 4 1 2 3 4 1 2 3 4 good sales development in the quarter 2015 2016 2017 Entrance Security and Safes & Vaults had a weaker ▪ Sales per quarter development Operating margin %, Operating margin % 12M, excl. IAC excl. IAC Strong order intake ▪ 2017 2016 2017 2016 REGION EMEA Q4 Q4 YTD YTD EMEA Sales by Product Area, YTD 2017 Net sales, MSEK 1,058 1,131 3,831 3,907 Organic growth, % -6 2 -3 0 Operating profit excl. IAC, MSEK 54 76 116 172 Operating margin excl. IAC, % 5.1 6.7 3.0 4.4 Items affecting comparability (IAC), MSEK -22 -23 -47 -59 Operating profit, MSEK 32 53 69 113 Page 14 GUNNEBO Q4 REPORT 2017
Region Asia-Pacific Q4 2017 400 18% 16% Sales decreased organically by 9% 350 ▪ 14% 300 Continued weak sales development in India – low ▪ 12% 250 spending from the public bank sector and lower sales 10% 200 of safes to global ATM manufacturers in the region 8% 150 Positive development of sales for other markets in 6% ▪ 100 4% the region 50 2% Entrance Security and Electronic Security ▪ 0 0% 1 2 3 4 1 2 3 4 1 2 3 4 developed well 2015 2016 2017 Weaker development for fire projects (Other) – OKI ▪ Sales per quarter project now complete Operating margin %, Operating margin % 12M, excl. IAC excl. IAC Safes & Vaults had a weaker sales development ▪ Strong order intake ▪ 2017 2016 2017 2016 REGION ASIA-PACIFIC Q4 Q4 YTD YTD APAC Sales by Product Area, YTD 2017 Net sales, MSEK 305 351 1,091 1,129 Organic growth, % -9 3 -4 5 Operating profit excl. IAC, MSEK 42 55 130 138 Operating margin excl. IAC, % 13.8 15.7 11.9 12.2 Items affecting comparability (IAC), MSEK -6 -3 -12 -5 Operating profit, MSEK 36 52 118 133 Page 15 GUNNEBO Q4 REPORT 2017
Region Americas Q4 2017 Sales decreased organically by 3% ▪ 350 20% 18% Positive development of sales in Brazil, flat in Mexico ▪ 300 16% Weak development of sales in North America, due to 250 ▪ 14% slow business to bank projects 12% 200 10% Safes & Vaults developed well particularly in the US ▪ 150 8% where sales to public administration picked up 6% 100 Entrance Security developed stably 4% ▪ 50 2% Sales of Electronic Security developed well in Brazil, ▪ 0 0% but continued to be weak on all other markets 1 2 3 4 1 2 3 4 1 2 3 4 2015 2016 2017 Cash Management sales decreased due to delays in ▪ Sales per quarter investments in bank projects Operating margin % 12M, Operating margin %, 0 excl. IAC Order intake was flat ▪ excl. IAC 2017 2016 2017 2016 REGION AMERICAS Americas Sales by Product Area, YTD 2017 Q4 Q4 YTD YTD Net sales, MSEK 269 294 1,069 1,052 Organic growth, % -3 4 1 -2 Operating profit excl. IAC, MSEK 38 41 123 128 Operating margin excl. IAC, % 14.1 13.9 11.5 12.2 Items affecting comparability (IAC), MSEK -2 -4 -6 -8 Operating profit, MSEK 36 37 117 120 Page 16 GUNNEBO Q4 REPORT 2017
Operating Profit by Quarter, MSEK Full year Operating profit excl. IAC 2017: 369 2016: 438 2015: 397 Operating profit 2017: 304 2016: 366 2015: 320 Operating profit Operating profit, excl. IAC Page 17 GUNNEBO Q4 REPORT 2017
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