Gunnebo Interim Report January-March 2019

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Q1 2019: Strong Order Intake for the Group

CEO Comments

Performance for the Quarter
Gunnebo’s business is to a large extent project-driven where order intake and sales fluctuate between quarters. Therefore we will also disclose the order intake per Business Unit as of Q1 2019. 

The first quarter of 2019 showed a strong order intake for the Group with year-on-year growth of 12% (7% in constant currencies). Entrance Control and Safe Storage reported double-digit growth of 27% and 16% respec-tively. Cash Management and Integrated Security reported a positive development on order intake. 

Sales for the Group were up 4% compared to Q1 2018 (flat in constant currencies). In Safe Storage, sales grew by 16% year-on-year (10% in constant currencies). Cash Management sales had a slight increase of 2% (-3% in constant currencies) and sales in Entrance Control contracted by 4% year-on-year (-9% in constant currencies) due to a large order delivered in Q1 last year. With the strong order intake, sales will however recover in the coming quarters. We have grown our sales two years in a row in both Cash Management and Entrance Control and we believe we are better structured today to capture growth in the market. In Integrated Security, sales contracted by 3% year-on-year (-4% in constant currencies) but with improved profitability.

Strategy to focus the business by product offering
In the quarter, Gunnebo has continued to implement the strategy aiming at simplifying the Group’s structure and focus by product offering through the four Business Units Safe Storage, Cash Management, Entrance Control and Integrated Security. We started working in the new structure in Q2 2018, and I am pleased to see an increase in customer interactions and clarifications of go-to-market models gradually coming through in the different Business Units.

As part of this strategy we are also investing in strengthening our brand positioning in the market. In the quarter we launched an updated web presence and successfully participated in four important exhibitions: EuroCIS in Germany, NRF in the US, Passenger Terminal Expo in the UK and Intersec in Dubai. In Integrated Security we launched a new Electronic Article Surveillance technology which allows larger stores to operate up to 100 antennas without disturbances and we continued the commercialisation of the retail digitisation solution, Gunnebo Retail Solutions.

Results in the quarter
The Group’s overall EBITA margin was 3.9% which was lower than last year. The lower margin is mainly explained by not yet seen improvements from ongoing cost saving activities and by underabsorption in Entrance Control and Cash Management due to the slow sales development in the quarter. In Integrated Security our EBITA improved despite lower sales which is encouraging.

In summary, we see increased activity in our overall customer interaction across Business Units, we are increasing our brand positioning activities and, while undergoing the change into Business Units, we are also identifying areas of efficiency improvements. The management team and I remain convinced that the company is on the right track towards sustainable profitable growth.

Gothenburg 26 April, 2019

Henrik Lange
President & CEO

• Order intake amounted to MSEK 1,432 (1,282), equaling a year-on-year growth by 12% (7% in constant currencies).
• Net sales amounted to MSEK 1,206 (1,157), equaling a year-on-year growth by 4% (flat in constant currencies).
• EBITA amounted to MSEK 47 (66) and the EBITA margin to 3.9% (5.7).
• Operating profit (EBIT) amounted to MSEK 40 (58) and the operating margin (EBIT) was 3.3% (5.0).
• Net profit for the period amounted to MSEK 7 (-2).
• Earnings per share amounted to SEK 0.09 (-0.01).
• Free cash flow amounted to MSEK 27 (39).

Full report is attached to this press release.

Invitation to Telephone Conference on 26 April 09.30 (CET)
To participate in the conference call, please dial in to one of these numbers:
+46 8 5055 8350
+44 33 3300 9032

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 latest 30 minutes prior to the telephone conference on 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 from late afternoon 26 April.

Group Communication

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 26 April 2019.

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 (38% of Group sales), Cash Management (21%) Entrance Control (20%), and Integrated Security (21%).

In 2018, Gunnebo's continuing operations had a turnover of MSEK 5,100 generated by 4,500 employees located in 25 countries across Europe, the Middle East, Africa, Asia-Pacific and the Americas.

Gunnebo’s share (GUNN) is traded on NASDAQ Stockholm under Mid Cap and Industrials.