Gunnebo Interim Report January-September 2017
Comments on the third quarter by Gunnebo’s President and CEO, Henrik Lange
As announced in a press release on October 8, the Group reported a weaker operating profit for the third quarter of 2017 than for the corresponding quarter of the previous year, MSEK 49 (91). However, development has been different across the business. Region Asia-Pacific had organic sales growth of 9% for the quarter. At the same time, organic sales decreased by 5% in Region EMEA and in Region Americas it remained unchanged. Excluding France, EMEA had negative organic growth of 3% and the Group as a whole remained unchanged.
DEVELOPMENT OF OUR REGIONS
Profitability for the period was not satisfactory due to both one-time and structural effects. Sales in Region EMEA developed negatively during the third quarter and organically sales decreased by 5%. The UK and Middle East developed well while other markets in the region had flat or negative development with the biggest drop coming from France. In France, a strategic review is ongoing.
In South Africa we have been seeing decreased demand for several quarters, so we have decided to establish a fully focused sales company without local production.
During the quarter, Gunnebo was named Security Company of the Year in Denmark at the annual Security User Expo and in Sweden, Gunnebo received a prestigious award from the Nordic security industry.
Region Asia-Pacific had strong organic sales growth of 9%. Development in the region has been driven primarily by strong sales in Entrance Security. During the quarter, the large-scale project with OKI has been completed as planned. In India, the public bank market continued to contract.
Region Americas had unchanged organic sales. Brazil had good development, and during the quarter Gunnebo was rated as the main brand within anti-shoplifting surveillance technology by retailers in the country.
Sales on other markets in the region developed weaker, primarily affected by lower sales to US public administration and severe weather conditions in the region. In Mexico, sales were affected by the September earthquake.
DEVELOPMENT OF OUR PRODUCT AREAS
In terms of product areas, the positive development of the Entrance Security business continued in the third quarter. It was primarily metro in China that continued to develop well, as well as good sales development to office buildings around the world. During the quarter, Gunnebo has signed some strategically important orders for airports in France, for example.
In addition, the development of sales within Cash Management solutions was positive. The sale of closed cash management, SafePay, continues to grow outside the Nordic region and sales of deposit solutions, in co-operation with global cash-in-transit companies, developed well.
Safes & Vaults had a weak sales development in the quarter, mainly due to lower sales in India, France, US and South Africa. In the quarter, we also had slightly lower sales of safes to global ATM manufacturers.
In Electronic Security, sales in the quarter were lower than the previous year due to weaker sales in France and Mexico in particular.
For the quarter, we reported an operating profit excluding non-recurring items of MSEK 67 and an operating margin of 4.8%. Profitability varied considerably between regions, where it was mainly Region EMEA which has brought down our overall results. We continue to focus on improving the efficiency and profitability of our sales companies in EMEA.
Gothenburg, October 25, 2017
President and CEO
THIRD QUARTER 2017
Net sales amounted to MSEK 1,409 (1,448), organic growth was -2%
Operating profit (EBIT) amounted to MSEK 49 (91) and the operating margin (EBIT) decreased to 3.5% (6.3)
Operating profit (EBIT) excluding non-recurring items amounted to MSEK 67 (105) and the operating margin (EBIT) to 4.8% (7.3)
Net profit for the period amounted to MSEK 16 (51)
Basic earnings per share amounted to SEK 0.21 (0.65)
Free cash flow amounted to MSEK -63 (18)
Net sales amounted to MSEK 4,359 (4,312), organic growth was -1%
Operating profit (EBIT) amounted to MSEK 200 (224) and the operating margin (EBIT) decreased to 4.6% (5.2)
Operating profit (EBIT) excluding non-recurring items amounted to MSEK 235 (266) and the operating margin (EBIT) to 5.4% (6.2)
Net profit for the period amounted to MSEK 84 (113)
Basic earnings per share amounted to SEK 1.09 (1.46)
Free cash flow amounted to MSEK -145 (52)
Full report is attached to this press release.
Invitation to Telephone Conference on October 25, 09.30 (CET)
To participate in the conference call, please dial in to one of these numbers:
+46 8 5664 2699
+44 20 3008 9807
Agenda for the Telephone Conference
09:25 Call in
09:30 Review of the interim report by Gunnebo’s President and CEO, Henrik Lange, and CFO, Susanne Larsson
09:55 Questions and answers
10:15 Closing of telephone conference
Copies of the presentation will be available 30 minutes prior to the telephone conference on www.gunnebogroup.com. Attending from Gunnebo AB are President and CEO Henrik Lange,
CFO Susanne Larsson and SvP Marketing & Communications Karin Wallström Nordén.
A recording of the telephone conference will be available on www.gunnebogroup.com from late afternoon October 25.
GUNNEBO AB (publ)
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 October 25, 2017.
The Gunnebo Group is a global leader in security products, services and solutions with an offering covering cash management, safes and vaults, entrance security and electronic security for banks, retail, mass transit, public & commercial buildings and industrial & high-risk sites.
The Group has an annual turnover of MSEK 6,100, employs 5,400 people and has sales companies in 28 countries across Europe, Middle East & Africa, Asia-Pacific and the Americas as well as Channel Partners on over 100 additional markets.
We make your world safer.