SALES AND RESULT IN BRIEF SALES BY REGION SALES BY PRODUCT AREA - PDF document

Q3 2017 2017 2016 2017 2016 2016 Q3 IN BRIEF Q3 Q3 YTD YTD Full year Net sales, MSEK 1,409 1,448 4,359 4,312 6,088 EBITDA excl. non-recurring items, MSEK 96 139 323 358 561 EBITDA margin excl. non-recurring items, % 6.8 9.6 7.4 8.3 9.2 EBITDA, MSEK 78 125 288 316 489 EBITDA margin, % 5.5 8.6 6.6 7.3 8.0 Operating profit (EBIT) excl. non-recurring items, MSEK 67 105 235 266 438 Operating margin (EBIT) excl. non-recurring items, % 4.8 7.3 5.4 6.2 7.2 Operating profit (EBIT), MSEK 49 91 200 224 366 Operating margin (EBIT), % 3.5 6.3 4.6 5.2 6.0 Net profit for the period, MSEK 16 51 84 113 209 Basic earnings per share, SEK 0.21 0.65 1.09 1.46 2.71 Free cash flow, MSEK -63 18 -145 52 159

CEO’ S COMMENTS ON THE THIRD QUARTER 2017 A s announced in a press release on October 8, the Sales on other markets in the region developed weaker, Group reported a weaker operating profit for the primarily affected by lower sales to US public third quarter of 2017 than for the corresponding administration and severe weather conditions in the quarter of the previous year, MSEK 49 (91). region. In Mexico, sales were affected by the September However, development has been different across the earthquake. business. Region Asia-Pacific had organic sales growth of 9% for the quarter. At the same time, organic sales DEVELOPMENT OF OUR PRODUCT AREAS decreased by 5% in Region EMEA and in Region Americas I n terms of product areas, the positive development of it remained unchanged. Excluding France, EMEA had the Entrance Security business continued in the third negative organic growth of 3% and the quarter. It was primarily metro in China that Group as a whole remained unchanged. continued to develop well, as well as good "Profitability in the sales development to office buildings around third quarter has not the world. During the quarter, Gunnebo has DEVELOPMENT OF OUR REGIONS been satisfactory. signed some strategically important orders Profitability for the period was not for airports in France, for example. We are performing a satisfactory due to both one-time and In addition, the development of sales within strategic review of structural effects. Cash Management solutions was positive. The our operations in Sales in Region EMEA developed sale of closed cash management, SafePay, negatively during the third quarter and France." continues to grow outside the Nordic region organically sales decreased by 5%. The and sales of deposit solutions, in co-operation UK and Middle East developed well while other markets with global cash-in-transit companies, developed well. in the region had flat or negative development with the Safes & Vaults had a weak sales development in the biggest drop coming from France. In France, a strategic quarter, mainly due to lower sales in India, France, US review is ongoing. and South Africa. In the quarter, we also had slightly In South Africa we have been seeing decreased demand lower sales of safes to global ATM manufacturers. for several quarters, so we have decided to establish a In Electronic Security, sales in the quarter were lower fully focused sales company without local production. than the previous year due to weaker sales in France and During the quarter, Gunnebo was named Security Mexico in particular. Company of the Year in Denmark at the annual Security User Expo and in Sweden, Gunnebo received a QUARTERLY RESULTS prestigious award from the Nordic security industry. For the quarter, we reported an operating profit Region Asia-Pacific had strong organic sales growth of excluding non-recurring items of MSEK 67 and an 9%. Development in the region has been driven primarily operating margin of 4.8%. Profitability varied by strong sales in Entrance Security. During the quarter, considerably between regions, where it was mainly the large-scale project with OKI has been completed as Region EMEA which has brought down our overall planned. In India, the public bank market continued to results. We continue to focus on improving the efficiency contract. and profitability of our sales companies in EMEA. Region Americas had unchanged organic sales. Brazil had Gothenburg, October 25, 2017 good development, and during the quarter Gunnebo was rated as the main brand within anti-shoplifting Henrik Lange surveillance technology by retailers in the country. President and CEO FINANCIAL TARGETS & OUTCOME Target 2017 2016 2017 2016 2016 2017 Q3 Q3 YTD YTD Full year 12M Organic growth -2% -1% -1% 0% 1% 0% 5% Operating margin 1) 4.8% 7.3% 5.4% 6.2% 7.2% 6.6% 7.0% Return on capital employed 1) 2) 11.4% 12.4% 11.4% 12.4% 12.8% 11.4% 15.0% Equity ratio 34% 32% 34% 32% 34% 34% 30% 1) Excluding non-recurring items 2) During the last twelve-month period 2 GUNNEBO Q3 REPORT 2017

SALES AND RESULT IN BRIEF SALES BY REGION SALES BY PRODUCT AREA YTD 2017 YTD 2017 18% EMEA APAC 18% 64% Americas SALES Q3 2017 VS Q3 2016 SALES YTD 2017 VS YTD 2016 Organic Structure Currency Total Organic Structure Currency Total EMEA -5% 0% 0% -5% EMEA -2% 0% 2% 0% APAC 9% 0% -3% 6% APAC -3% 0% 4% 1% AMERICAS 0% 0% -2% -2% AMERICAS 2% 0% 4% 6% TOTAL -2% 0% -1% -3% TOTAL -1% 0% 2% 1% GROUP SALES & OPERATING MARGIN BY QUARTER Sales per quarter Operating margin %, excl. NRI Operating margin % 12M, excl. NRI QUARTERLY SALES 2015 – Q3 2017 Sales 2015 Sales 2016 Sales 2017 Operating margin % 12M, excl. NRI 2015 Operating margin % 12M, excl. NRI 2016 Operating margin % 12M, excl. NRI 2017 0 3 GUNNEBO Q3 REPORT 2017

2017 2016 2017 2016 2016 % GROUP SALES REGION EMEA Q3 Q3 YTD YTD Full year YTD Net sales, MSEK 875 922 2,773 2,776 3,907 Organic growth, % -5 0 -2 0 0 Operating profit excl. non-recurring items, MSEK 4 42 62 96 172 64% Operating margin excl. non-recurring items, % 0.5 4.6 2.2 3.5 4.4 Non-recurring items, MSEK -9 -11 -25 -36 -59 Operating profit, MSEK -5 31 37 60 113 SALES DEVELOPMENT Q3 2017 RESULT DEVELOPMENT Q3 2017 Organically, t he region’s sales decreased by 5% Operating profit excluding non-recurring items during the third quarter. Sales developed well in amounted to MSEK 4 (42), giving an operating the UK and Middle East while other markets in the margin of 0.5% (4.6). region had flat or negative growth. The biggest The lower profit is mainly explained by the drop in sales came from France. Excluding France, continued weak development of sales in France. sales in the region had an organic decrease of 3%. During the quarter Gunnebo has also closed its Sales within Cash Management developed well in manufacturing unit in South Africa, affecting some France and UK whereas other markets in the 100 employees. Costs connected to the closure, as region developed weaker. well as costs for continued activities for increased productivity and structural changes in Europe, Entrance Security had a good development in were reported as non-recurring items. Southern Europe and the Nordics. Safes & Vaults had a weaker development across the region. Electronic Security and related services had a weaker development, primarily due to continued weak sales in France. Sales per quarter Operating margin %, excl. Operating margin % 12M, non-recurring items excl. non-recurring items QUARTER HIGHLIGHTS EMEA IN BRIEF ▪ UK: A new stadium chooses entrance security gates SVP: Heinz Jacqui | Sales Companies: 17 from Gunnebo to secure the efficient flow of people. Europe, Middle East & Africa (EMEA) is the Group’s largest ▪ Italy: The Italian Mass Transit Ministry chooses region. It is divided into eight sub-regions: Nordic, Central Gunnebo SpeedStiles to improve the control of the Europe, South Europe, UK/Ireland, France, East Europe, flow of passengers at its busiest stations. Middle East and Africa ▪ France: Marseille Airport is making it more efficient for travellers to move through the different sections SALES BY PRODUCT AREA YTD 2017 of the airport by installing Gunnebo immigration gates at border control. ▪ Middle East: A high-risk governmental site in Abu Dhabi turns to Gunnebo to upgrade its entrance security. ▪ Nordics: Gunnebo in Denmark is awarded Security Company of the year at the annual Security User Expo. In Sweden, Gunnebo wins the Nordic security industry's prestigious annual prize. 4 GUNNEBO Q3 REPORT 2017