Gunnebo Interim Report July-September 2019
All-time high order intake and strong sales from Entrance Control boosts Group growth in the quarter
President and CEO Henrik Lange Comments to Q3 2019:
I am very satisfied with the strong order intake in the quarter, up 11% on last year representing an organic growth of 4%. Sales were also strong in the quarter, up 5% on last year.
In Entrance Control, we experienced an all-time high order intake of MSEK 500 in the quarter, where we have both taken several important airport orders and included a quarter of the newly acquired company, Cominfo. Sales in the quarter grew by 25% and will continue on a high level going forward with the good order stock we now have. The Cominfo acquisition is a good addition to the Business Unit and the integration work is following the plan.
In Safe Storage, order intake was up 13% and sales were up 8% mainly driven by a strong performance in Asia. One part of our strategy in Safe Storage is to move into partnerships for the distribution of safes in Europe. We have developed a concept for this partnership model and after the end of the quarter, we have announced a partnership with Insafe on the UK market. With Insafe as our distributor in the UK, we will get an excellent market coverage with a very professional partner. It also gives us an opportunity to grow our business in the UK market as well as making our fixed costs variable.
In Cash Management, order intake was down by 24% where Americas improved from last quarter, but the order intake was lower in both Europe and Asia- Pacific & Middle East. Sales were down by 12%. Sales increased to Bank, were flat to Retail whereas sales to CIT partners had a weaker development. We see signs of improvement over the coming quarters.
In Integrated Security, order intake was down by 15% year-on-year and sales were down by 4%. In the Americas, sales grew wheras it contracted in the other regions. We have been working with profit improvement activities in this area which are now having a positive effect on the Business Unit’s EBITA.
Results
The Group EBITA of MSEK 92 in quarter three was in line with last year. The EBITA margin was 6.7%.
Entrance Control continues to deliver very strong results with MSEK 66 in EBITA at 18% margin. Safe Storage also continues to deliver growth in both order intake and sales. The EBITA result was MSEK 37 at 7% margin. Apart from driving the business, focus in the quarter has been on the planned cost-efficiency measures and changing the business model to an indirect partnership model resulting in a new partnership in the UK.
Cash Management had a weak result caused by lower sales in the quarter. The order intake in the Americas increased, whereas it decreased in the other regions. For both order intake and sales, the big deviation compared to last year was due to phasing of projects to CITs. The EBITA was MSEK 9 at 4% margin. We are addressing the situation and work both on cost and on developing existing and new partners to improve the performance in the coming quarters.
In Integrated Security, the order intake and sales grew in the Americas whereas they contracted in the other regions. Structural measures on right-sizing continued and hence the EBITA improved by MSEK 6 and was positive by MSEK 5 in the quarter.
The cost-efficiency programme which was launched in Q2 is progressing as planned. The programme consists of two main parts: structural changes due to the change into a global Business Unit structure and continued downsizing mainly in our European business. Costs will be taken in quarter four for the structural changes announced, with the full Business Unit structure and changes in Group management and the related savings to have full effect as from year-end. The continued downsizing in Europe has been mobilised and started to be implemented during the end of the quarter. Full cost and benefits of this part of the programme will appear in the coming quarters. All in all, the programme is running as planned to give full effect as from July next year.
Rights issue completed
The Gunnebo rights issue has now been completed successfully according to plan. The rights issue has been used for the Cominfo acquisition and also to strengthen the balance sheet by reducing the net debt. This improved financial strength will safeguard the implementation of our strategic plan.
New global Business Unit structure and Group Executive Team changes
During the third quarter, we have as planned started the process of implementing our new focused Business Unit structure also in Americas and Asia Pacific, Middle East & Africa. The roll-out process in these regions is on-going and will be fully implemented in the fourth quarter.
As previously announced, I will be replaced as CEO by Stefan Syrén, who will take up the position as President and CEO as of 7 November 2019. He will also remain SVP for Business Units Safe Storage and Integrated Security.
During the last 18 months, the Group has changed into a more focused Business Unit structure with a clear plan to deliver profitable growth for the coming years. As I now step down as President & CEO, I thank you all for your support and I wish Stefan and the team every success in the future.
Gothenburg 6 November 2019
Henrik Lange
President & CEO
Third Quarter 2019
- Order intake amounted to MSEK 1,547 (1,396), equalling a year-on-year growth of 11% (8% in constant currencies)
- Net sales amounted to MSEK 1,373 (1,303), equalling a year-on-year growth of 5% (3% in constant currencies)
- EBITA amounted to MSEK 92 (92) and the EBITA margin to 6.7% (7.1)
- Items affecting comparability (IAC) amounted to MSEK -14 (12)
- Operating profit (EBIT) amounted to MSEK 75 (88)
- Net profit for the period amounted to MSEK 39 (56)
- Earnings per share amounted to SEK 0.50 (0.74)
- Free cash flow amounted to MSEK 52 (15)
- Newly acquired Cominfo fully consolidated as of Q3
- Rights issue of MSEK 363 completed
Events after closing of the period
- As earlier announced Stefan Syrén will take up the position as President and CEO, effective as of 7 November 2019.
January-September 2019
- Order intake amounted to MSEK 4,342 (3,971), equalling a year-on-year growth of 9% (6% in constant currencies)
- Net sales amounted to MSEK 3,947 (3,708), equalling a year-on-year growth of 6% (3% in constant currencies)
- EBITA amounted to MSEK 212 (224) and the EBITA margin to 5.4% (6.0)
- Items affecting comparability (IAC) amounted to MSEK -23 (1)
- Operating profit (EBIT) amounted to MSEK 183 (198)
- Net profit for the period amounted to MSEK 70 (98)
- Earnings per share amounted to SEK 0.91 (1.30)
- Free cash flow amounted to MSEK 73 (-9)
Full report is attached to this press release.
Invitation to Telephone Conference on 6 November 09.30 (CET)
To participate in the conference call, please dial in to one of these numbers:
+46 8 5664 2707
+44 33 3300 9274
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 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 6 November.
GUNNEBO AB (publ)
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 and the Securities Markets Act. The information was submitted for publication, through the above contact persons, at 08.01 CET on 6 November 2019.