Gunnebo Year-End Report 2017

Comments on the fourth quarter by Gunnebo’s President and CEO, Henrik Lange

During the fourth quarter the strategic review of our operations in France has continued and production in South Africa has been closed, as previously decided. The quarter's sales were lower than in the previous year, but order intake developed favourably, which means that the Group will enter 2018 with a stronger order book than 2017.

DEVELOPMENT OF OUR BUSINESS
During the fourth quarter, sales decreased compared to the fourth quarter of 2016. This is mainly a consequence of weak sales to banks in India and South Africa and the effect of a large Entrance Control order delivered in quarter four 2016 in Europe.  

Sales in Region EMEA fell in the fourth quarter. Order intake, on the other hand, developed positively and the Group continues to develop the business with existing customers as well as new customer segments. For example, pre-boarding gates from Gunnebo will be installed at Munich Airport and Coop will continue to turn to us to service the cash management solutions it has installed in stores across the Nordic region.

Sales in Region Asia-Pacific decreased in the quarter mainly due to the continued weak development of the public banking market in India, which was amplified by weak sales of ATM safes. However, Region Asia-Pacific had a strong order intake in the fourth quarter. Gunnebo received its first major order in India for ticket gates for the metro network in one of the country’s major cities and, Incheon Airport in Seoul, South Korea, chose entrance security solutions from Gunnebo. Both of these orders demonstrate how Gunnebo is shifting its customer segment focus in the region.

Region Americas also had lower sales in the quarter, where development was good in Brazil and unchanged in Mexico. In North America, sales were temporary weaker due to slow business in bank projects. One noteworthy order received during the quarter came from Brazil, where several large international food retailers chose Gunnebo’s warehouse solutions to be gradually installed in their stores around the country. In the United States, Gunnebo delivered entrance security solutions to the Empire State Building in New York.

In terms of product areas, the positive sales development within Cash Management has continued in the fourth quarter. In Entrance Security, sales have remained unchanged at a high level during the quarter. Safes & Vaults developed weakly during the quarter, due to lower sales of safes to global ATM manufacturers and the continued low demand from banks in several markets. In Electronic Security, sales were unchanged during the quarter, which is an important improvement against the decline earlier in 2017.

RESULTS
For the quarter, we reported an operating profit excluding items affecting comparability of MSEK 134 and an operating margin of 8.2%. For the full year, we reported an operating income excluding items affecting comparability of MSEK 369 and an operating margin of 6.2%.

Work on continuing to improve our business in line with our strategy for profitable growth continues. During the year, we have also conducted a review and prioritisation of our product areas in respect to range, which will further strengthen our focus on customers and delivery.

Gothenburg, 2 February 2018

Henrik Lange
President and CEO

FOURTH QUARTER 2017

• Net sales amounted to MSEK 1,632 (1,776), organic growth was -6%
• Operating profit (EBIT) amounted to MSEK 104 (142) and the operating margin (EBIT) decreased to 6.4% (8.0)
• Operating profit (EBIT) excluding items affecting comparability (IAC) amounted to MSEK 134 (172) and the operating margin (EBIT) to 8.2% (9.7)
• Net profit for the period amounted to MSEK 76 (96)
• Basic earnings per share amounted to SEK 0.91 (1.25)
• Free cash flow amounted to MSEK 71 (107)

JANUARY-DECEMBER 2017

• Net sales amounted to MSEK 5,991 (6,088), organic growth was -3%
• Operating profit (EBIT) amounted to MSEK 304 (366) and the operating margin (EBIT) decreased to 5.1% (6.0)
• Operating profit (EBIT) excluding items affecting comparability (IAC) amounted to MSEK 369 (438) and the operating margin (EBIT) to 6.2% (7.2)
• Net profit for the period amounted to MSEK 160 (209)
• Basic earnings per share amounted to SEK 2.00 (2.71)
• Free cash flow amounted to MSEK -74 (159)
• The Board proposes a dividend of SEK 1.20 (SEK 1.20) per share.

Full report is attached to this press release.

Invitation to Telephone Conference on 2 February 09.30 (CET)

To participate in the conference call, please dial in to one of these numbers:

+46 8 5661 9353
+44 20 3008 9819

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 2 February.

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

www.gunnebogroup.com

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 February 2, 2018.

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 6,000, employs 5,200 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.

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