Gunnebo Interim Report January-June 2018 – Including New Financial Targets
Comments by Gunnebo’s President & CEO
We have made a strategic review of the product portfolio of Gunnebo and decided to focus on three core areas going forward: Safe Storage, Cash Management and Entrance Control. In these Business Units we are aligning our way of working and competence to become more customer oriented and increase the focus on development of both hardware and software solutions to generate future profitable growth. In the fourth Business Unit, Integrated Security, which to a large extent is a local integrator business with lower profitability, we will work to improve the performance.
Gunnebo Plans to Divest Its Business in France, Belgium and Luxembourg
As a first result of the strategic review we have signed an offer to divest our business in France, Belgium and Luxembourg. Gunnebo intends to accept this offer, subject to works council consultation and antitrust clearance. The transaction is expected to be finalized during the fourth quarter 2018. This business is reported as discontinued operations, see more information in note 3 on page 21 in this report.
New Organisational Structure
As announced earlier today we have changed the organisational structure to reflect the strategic shift in focus. Going forward, Gunnebo will have the product dimension as the primary reporting segment. Hence we have adjusted the Group’s overall organisation to align our strategy with how we manage, follow up and report our business.
For Safe Storage, Cash Management and Entrance Control, the focus will be on customers, products and solutions, as well as to implement a dedicated market strategy for each Business Unit. For Integrated Security, being mainly a local integrator business, we will review the portfolio and work with profitability improvements.
As a consequence, the quarterly report segment structure is also changed as from this quarter to reflect the new product focus. Instead of the region as the primary segment, we now disclose our performance in four Business Units: Safe Storage, Cash Management, Entrance Control and Integrated Security.
New Financial Targets
With a clear focus on key Business Units and with an organisational structure supporting this focus, we will change our financial targets. The Group’s new financial targets will be:
- Annual Sales Growth of 5%
- EBITA of >10%
- Net Debt/EBITDA of < 2,5
- Annual Dividend of 30-50% of net profit
The Sustainability targets will remain as defined in 2016.
See more information on the Group’s new financial targets in the Interim Report.
Performance in the Quarter - Continuing Operations
During the second quarter we experienced growth in Business Units Safe Storage and Entrance Control. Safe Storage growth was mainly due to good sales development for ATM safes. The sales development in India and China was also positive. Business Unit Entrance Control continued to grow in the second quarter, with good sales growth in both Europe and Asia-Pacific. Business Unit Cash Management and Integrated Security both had contracting sales in the quarter. In Cash Management sales declined due to big projects invoiced last year. However, interest in Gunnebo’s Cash Management solutions is high in the market and we launched new deposit solutions in the quarter. Business Unit Integrated Security sales declined mainly due to the finalisation of the OKI Fire Business project which was delivered last year.
Performance in the Quarter - Discontinued Operations
During the second quarter, discontinued operations recorded sales of MSEK 270 and an EBIT of MSEK -21. Including a transactional loss of MSEK -609, the net profit/loss ended at MSEK -625. See note 3, page 20 in this report, for more information.
With the new product focus and structure in place we are ready to start developing a more focused and leaner Gunnebo for the future.
Gothenburg 19 July, 2018
President & CEO
- Net sales for continuing operations amounted to MSEK 1,248 (1,225), sales growth was 0%
- EBITA for continuing operations amounted to MSEK 66 (98) and the EBITA margin amounted to 5.3% (8.0)
- EBIT for continuing operations amounted to MSEK 52 (81) and the EBIT margin amounted to 4.2% (6.6)
- Net profit for the period, including discontinued operations, amounted to MSEK -605 (39)
- Earnings per share, including discontinued operations, amounted to SEK -7.94 (0.51)
- Free cash flow, including discontinued operations, amounted to MSEK -63 (-76)
- Net sales for continuing operations amounted to MSEK 2,405 (2,397), sales growth was 0%
- EBITA for continuing operations amounted to MSEK 142 (170) and the EBITA margin amounted to 5.9% (7.1)
- EBIT for continuing operations amounted to MSEK 110 (145) and the EBIT margin amounted to 4.6% (6.0)
- Net profit for the period, including discontinued operations, amounted to MSEK -607 (68)
- Earnings per share, including discontinued operations, amounted to SEK -7.95 (0.88)
- Free cash flow, including discontinued operations, amounted to MSEK -24 (-82)
Full report is attached to this press release.
Invitation to Telephone Conference on 19 July 09.30 (CET)
To participate in the conference call, please dial in to one of these numbers:
+46 8 5664 2662
+44 20 3008 9809
For more information, please contact:
Henrik Lange, President & CEO Gunnebo AB, tel. +46 10 2095 026, or
Susanne Larsson, CFO Gunnebo AB, tel. +46 10 2095 026, or
Karin Wallström Nordén, SvP Marketing & Communications Gunnebo AB, tel. +46 708 28 33 39
This information is information that Gunnebo AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the contact persons set out above, at 08.01 CET on 19 July, 2018.
Gunnebo AB (publ) is a leading, global security provider offering a range of sustainable security products, services and software to retail, mass transit, public and commercial buildings, industrial and high-risk sites, and banks. Gunnebo operates within four core business units: Safe Storage (35% of Group sales), Cash Management (22% of Group sales) Entrance Control (20% of Group sales), and Integrated Security (23% of Group sales). In 2017, Gunnebo continuing operations had a turnover of MSEK 4,900 generated by 4,400 employees located in 25 countries across Europe, the Middle East, Africa, Asia-Pacific and the Americas.
The discontinued business represented MSEK 1,130 turnover with 930 employees in three countries.
Gunnebo’s share (GUNN) is traded on NASDAQ Stockholm under Mid Cap and Industrials.