Good day and thank you for standing by. Welcome to Loomis Q1 2022 report conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star and one on your telephone. I must advise you that this conference is being recorded today on Thursday, May 5th, 2022. I'd now like to turn the conference over to your speaker today, Patrik Andersson, CEO of Loomis. Please go ahead. Thank you very much. Good morning, everyone, and welcome to the first quarter presentation for Loomis. As mentioned, I'm Patrik Andersson, CEO of Loomis. With me here today, I have Kristian Ackeby, CFO, and Anders Haker, who is the Chief Investor Relations Officer. I will give a short overview of the quarter and then open up for questions. Let's start the presentation and turn to the next page. That is the disclaimer page. Let's quickly turn over to the next page. Usually, I do a couple of comments when it comes to the cash market, so I'm not going to go through all the points on this slide, but just a couple of comments from my side. Of course, we still see that cash in circulation continues to grow both in Europe, LATAM, in the U.S., as we have seen over the last quarters and years. The tragic war in Ukraine has increased the demand for cash in many countries, and we see that for instance, the withdrawals from ATMs are increasing in several countries. Just to mention Sweden, as we are sitting in Sweden, withdrawals from ATMs have increased by 30% in this country, and that goes for many countries across Europe. We also see an increasingly intense political discussion about the role of cash in society, and many politicians and lawmakers realize that it's important to protect cash in different aspects. Cash is important for many people around the globe, just not the vulnerable people, but everybody in the world. Most importantly, new opportunities open up both in Europe and in the U.S. One very tangible example is SafePoint in the U.S., which grew by 21% in the quarter, but there are many more opportunities like this in all business line. We see over the last couple of years that cash has proven to be very resilient to the changes in the payment landscape. Being part of the cash industry, we are now stepping up a lot of activities to protect cash and give cash a voice in the payment landscape. We turn to the next page, which are the highlights of the quarter. Let me just start by emphasizing that when it comes to the revenue, this is the best quarter ever from a from, as I said, a revenue point of view, even though we had some impact from the pandemic in the quarter. During the quarter, revenue picked up very strongly by the end. We see a gradual increase as then restrictions were sort of loosened up. That's number one. Number two, some of you might have seen, we released a press release this morning, and we're gonna continue to repurchase Loomis share up to SEK 200 million until June 2022. You should see that as a sign that we very much believe in the business and also the future prospects of Loomis. Now, if I then go back to the slide and let's start from the beginning. We first of all have no business in Ukraine or Russia, and therefore there is no direct impact on Loomis when it comes to business. However, we have supported the Ukrainian people with different supplies but also given a donation to the Red Cross in Ukraine. We have also now decided on the date when I step down and my successor, Mr. Larrea, is taking over, and that would be on May 23rd, 2022. In a couple of weeks. Aritz has made a really good job as a CEO of Loomis U.S., which has developed very strongly during the last couple of years. We have also set new targets. In March, we had a couple of market days, and I'm not gonna go through the targets. These targets reflect a very strong belief in the business of Loomis. When it comes to acquisition in Switzerland, this is the main driver for the acquired growth, and it's progressing very well. As I have said many times, Switzerland will be one of the most important countries when it comes to business for Loomis in the coming years. Organic growth was at 15% in the quarter. We see that travel and tourism have not fully recovered, but we expect that to pick up, and that will, of course, positively affect volumes in all markets. As some of you have been, you know, going to airports, you can see that for yourself, that more people are traveling and then also using cash, of course, or our FX services. When it comes to the operating margin, that was on 10%. We see, of course, that the increased volumes combined with all the efficiency measures we have done during the last couple of years is now paying off when it comes to the margin. Operating cash flow was at 34%, but then you should keep in mind that Q1 2021 was positively impacted by lower activities when it comes to capital expenditure. That's no, you know, major thing for us. Let's then turn to the next page. Here you see the slide showing a good illustration of how the margin has developed over time. We had a low point in Q2 2020, but we have then had a strong recovery after that. As I mentioned, excluding Loomis Pay, the margin was at 10% in Q1 2022. Let's turn to the next page. When it comes to the segment, let's start with Europe and LATAM. Overall a strong quarter when it comes to both revenue and margin, I would say. When looking at the top line, real growth was at 21%. As I mentioned, the acquisition in Switzerland is progressing very well. Organic growth was at 15%. The positive growth, which started at the end of mid-2021, continued quarter by quarter into the first quarter and expanded month by month, as I mentioned. We see a very strong recovery in the main markets in Europe, like France, Spain, etc. Organic revenue reached 91% of Q1 2019 levels, which is an improvement with one percentage point. As I said, the highest growth rate was reported in March. March was very strong. We see that it's a sequential improvement of the volumes during the months. Operating margin at 8.7%. All the hard work we've done when it comes to cost and optimizing the infrastructure is now paying off as volumes are coming back. We also see that the synergies from the acquisition in Switzerland also gives good positive results. Let's turn to the next page and over to the U.S. Overall, a very strong momentum in the U.S. business. Organic growth was at 15% in the quarter, and we are now at 121% of the Q1 2019 levels. We see that if you compare to Q4 2021, that the level was at 114%. A strong momentum, as I said. All business lines are improving and expanding, and the positive trend is expected to continue. SafePoint, which is really important for us, of course, grew by 21%. Now accounts for 19% of the revenue in the U.S. When it comes to the operating margin, that was on at 13% in the quarter. We have, as I said a couple of times, some structural shortages of labor in the U.S. market, which then temporarily reduces the margin. That has to do with increased overtime, increased salaries, and investment in people and personnel in the U.S. business. You should see that as a sign that we are now getting ready for more growth in the U.S., and it's investment into the business and people to be able to capture that growth and both grow organically and take market share. When it comes to price increases, I got a couple of questions on price increases yesterday. We are fully under control with price increases and compensate for all the cost increases we are receiving, and that is already done in the U.S. market. Let's turn to the next page and talk a bit about Loomis Pay. We are moving ahead with Loomis Pay. We are now launched in Denmark, Sweden, Norway. We are building up the sales organization in these countries. We see that volume is increasing day by day, week by week through our platform. The preparations for rollouts of Loomis Pay in one more major or in a major market in Europe is underway, and the ambition is to launch in a quite sizable market then in Q3 2022. We are then, you know, investing quite a lot of money, time, and effort into the platform of Loomis Pay. I've seen it myself many times, and it's really state-of-the-art when it comes to both software and hardware, and the customer reaction we get back is very positive. Next step for Loomis Pay is then to be launched in one country in Europe coming up. Let's turn to the next page, which is the P&L, which we have as a reference, and there are no points I'd like to add. I've been through it in my presentation. Let's turn to the next page, which is Q&A. I'm through with my presentation. Operator, we now open up for questions, please. Oh, excuse me. Yes. Yeah, we open up for questions now, please. Just as a reminder, if you wish to ask a question, you need to press star and one on your telephone. Your first question comes from the line of Daniel Thorsson from ABG, please ask your question. Yes, thank you very much. First of all, thank you very, very much for the six years, Patrik. It has been very successful in all means, in my view, at least, both before the pandemic, in the pandemic, and also now after we see that in this report. My first question is how should we think about the U.S. margin throughout the quarter here? It sounds like growth started off slower in January, so the margin would reasonably be lower there and ended the quarter in March with a higher level. Is that expected to continue into Q2 here? For how long time do you foresee the slightly lower margin? Thank you all. First of all, thank you very much for the kind words. Just to say how we see the U.S. margin developing. We see we need Q2 to continue to invest in people, salaries over time, and especially train all the people that we have now taken on board. That is taking some time to get that efficiency into the business. I expect that Q2 will still be an investment quarter for the business in the U.S. Then, after that, we would see margins ticking up again. That's how I see that. Excellent. That's helpful. A second question related to Q2 here and travel data and indications you see for tourism, et cetera. We are a month into the second quarter. We have Easter behind us in April. What have you seen throughout April? Have you seen much higher travel tourism FX-related business in April versus last year of April? Or any data that we can rely on here to see that the recovery is continuing? Yes, of course we follow that, but it's very difficult to make a comparison with last year. It's a bit unfair because there was basically no activity last year during Easter. We see very much that we follow the number of flights and things like that. We talk to our markets, our people in the different markets, and there is a high activity in April when it comes to traveling, when it comes to spending, number of hotel nights booked. You know, all of that is pointing in a positive direction for us. Definitely. Okay. You see that across Europe and the U.S., I guess? Yeah. All across the world. Yeah, yeah. I mean, the activity in U.S. has always been high, but of course, the delta, the difference is in Europe that we see that, you know, the economic activity is really picking up. Excellent. The final question for Kristian. Cash flow was a bit weak in the quarter. You mentioned it was, seasonality and also lower CapEx levels last year. Anything we should keep in mind here on the cash flow in this quarter and also ahead in 2022? For the cash flow in the quarter, seasonality is one factor. I mean, Q1 is usually weak. Last year, since we cut the CapEx, we had higher sort of percentage than we maybe normally have. To look into sort of one-time impact, you could say, I mean, accounts receivables are increasing, but DSO continued to be stable, so that is positive. When you look into negative one-time effect, we have timing in cash stock in this quarter impacting us approximately SEK 100 million negatively. That is one factor that should come back positively later on. On the other hand, we also have approximately SEK 100 million in subsidies, where we have delayed payments to governments of more or less the same amount, and that is due for payment later this year. You can say that these one-time effects will be a washout later during the year. Okay. That's clear. Thank you very much, both of you. As a reminder, if you wish to ask a question, please press star and one on your telephone keypad. Your next question comes from the line of KJ Bonnevier from DNB Markets. Please ask your question. Yes. Good morning, Patrik and Kristian. You very helpfully started to split up the business as you indicated in the business areas on ATM, SafePoint, and International, or your international operation and all these parts. Could you just give us an idea about how that the new business kind of breakdown corresponds to the old one? How did you report the ATM business before? It might be possible to create some sort of longer time series for us. Yeah. To draw the sort of bigger lines here to start with without getting into details, you can say, to simplify, you can say that SafePoint is to a large extent, 50/50 CMS, CIT, if we now simplify not including technology and so on. If you look into ATM, you have a larger portion CIT, currently in that structure. I hope that can help you to sort of nail down to get back to the approximately 60% CIT and close to 30% CMS and, 10% other. I hope that can help you to get the numbers right. Excellent. It's good to see that it also seems like SafePoint in Europe is moving quite nicely. Is that an effect of the Swiss acquisition and the impact of that, or is there anything else happening underlying? Yeah, it's both actually. I mean, SafePoint in Europe is growing, but from a much lower base than we have in U.S. It's correct, like you said, this is also Swiss acquisition coming into these numbers, helping the numbers to grow faster than the average, sort of, that's improving their portion. If you look into SafePoint also in Europe from an organic perspective, it's growing and growing well. When you look at the business model and how much you can charge for a SafePoint in Europe to compare to the U.S., is it about the same kind of monthly revenue you can get out of an installation? Yeah. That's. You should have the same maps when it comes to Europe and U.S., yes. Excellent. Looking at coming back to the U.S. and the salary and overtime that affected you in the quarter, do I understand it right that you now feel that you have basically the staffing that you need, but it's more of a question of optimizing and getting them into the operation? There is not a lack of employees, if you put it like that, to the same degree at this stage? No, I think that, of course, there might be a couple of more people we need to recruit, but I think that when I spoke to the CEO in the U.S., he told me that we have added the last couple of months, 800 people to the business. It's, you know, a huge recruitment process. I think that more or less, I mean, I guess some more people we need, but the bulk has, you know, come into the business. Now it's about training, it's about optimizing the routes, it's about, you know, getting the efficiency out of that. Also, we see that we need to get what we call one-man vehicles, one-man trucks into the business to be able to get the efficiency as well. So, there are a number of activities that we're doing in the U.S. to get the efficiency up. I think it's very, very important to say that these activities we do now is really to be able to continue to grow, to continue to take market share, and especially also give the quality that the customers are asking for also in the market. it's really a investment into the future, of course. Going through your annual report, I noticed going through your cost structure that the personnel cost as part of the cost structure quite dramatically dropped during 2021 compared to the historic level. Obviously, there was some other costs that probably balance it. Is there anything in the mix happening here or the way you are staffing your operation that is affecting those numbers? No. I'm sorry, I don't have that number in front of me now. It's maybe we can take that separately because we don't have any significant change in our structure that impact it. It can be from country to country and how the subsidies have played in and so on, because, I mean, both 2020 and 2021 have been impacted by subsidies in different ways as well. There might not be fully representative to look into the numbers for 2020 and 2021 when you look into the structures. Maybe we can have a look separately because I was not really prepared for that one. Okay. Now one final on the quarter. Obviously, Europe seems to be coming out of COVID to different degrees. Which countries do you feel have come the furthest when you look at your footprints in Europe, where you can say the normalization has come the furthest compared to pre-COVID or something like that? Where do you still feel there is the biggest opportunity for normalization? I think that we see quite a good improvement in all countries from the beginning, of course, to get to these figures we have right now. I mean, the big countries need to perform. We see that happening in Switzerland. We see that happening in Spain, of course, and so on. The one where we are lagging a bit behind is actually U.K. for different reasons. There have been massive, you know, lockdowns and restrictions for a long period of time. Here we hope and expect the volumes to come back. Otherwise, we basically see a very good momentum in all our markets, I would say. Good to hear. One final. Looking at the foreign exchange distribution operation also seems to be in good recovery. I saw with the new breakdown that you had revenues in that line of about SEK 250 million last year. Can you remember what that business was pre-COVID? With pre-COVID, we were closer to SEK 500 million, and now we also have slight mix impact in that one. You can say we have more like repatriation volumes, which comes with a sometimes lower margin. We need tourists to come back, so we get the margin we have when we are closer sort of to the consumer, which we are when we get. Even if we are not B2C, we have businesses that are sort of closer to the customer, which brings higher margins. You can say that March was also a tipping point for the FX business, that of course we have been suffering in the FX business for two years, but really March was the tipping point, which is very much correlated to what I said before, that you know increased tourism, increased travel. We are not so dependent in that business unit or business line on business travelers. It's much more the tourism that needs to come back. That's a good sign that things are getting at least back, slightly back, more or less back to normal. Not fully yet, but more or less. Excellent. Thank you very much. Good luck with your new ventures, Patrik. Thank you very much, KJ. The next question comes from the line of Johan Dahl from Danske Bank. Please ask your question. Yes, thanks. Good morning, gentlemen. Just two quick questions. Firstly, on Europe, you're talking about this 91% sort of recovery level pre-pandemic. If you take into account the sort of structural reductions that you've made primarily in the U.K., where would that sort of percentage be, taking that into account? Secondly, also, Patrik, on the U.S., you talked about the price hikes being successful, you know, you being able to compensate, et cetera, for increased costs. I'm just wondering, you know, inflation is running, you know, extremely high at the moment. We're seeing margin sloping sequentially in the U.S. I'm hearing what you're saying regarding these growth initiatives that they cost briefly, but what gives you the confidence to say sort of that these successful or these price hikes that you've made in Q1 will actually be neutral to you guys from a cost perspective? Actually have a window, I guess, here in Q1 on prices. Thanks. No, I'll start with the last question. I think we have done the biggest price increase ever in the history of the business in the U.S., and that has been very successful. Of course, we have sort of taken also the security measures in that sense to see that it should be enough. You never know, of course, things can, you know, go, but what we see now and we expect that price increase should be enough to cover cost inflation in all aspects. It's a major price increase we have taken in Q1. The first question, I didn't really understand that, but volumes in general are now then, you know, picking up in Europe over the quarter, and March was really strong, so it's picking up now. In the quarter, we're at 91%, but of course in March, that was even higher. In the U.K., it's much more about that we have sort of reduced the cost base quite dramatically in terms of number of people, number of vehicles and number of branches. So the cost structure in the U.K. is much lower, I would say, than the previous. That goes in general for Europe. We have taken a lot of measures in many countries in Europe to take down the cost base, and that's what you see now that the volume's coming back, that you have an impact, which is quite positive on the margin. I don't know if that answers your question, but that's the situation. That's good enough. Thanks, Patrik and Kristian, and best of luck here, Patrik. Thanks. Thanks. Your next question comes from the line of Johan Eliason from Kepler. Please ask your question. Yeah. Hi, this is Johan at Kepler Cheuvreux. Just a question a little bit on your statement here that you've seen a structural decline in all cash visibility in the Nordic market, but that doesn't really impact you. Can you sort of give us some insights on where in the Nordics is the volumes today versus where the pandemic was? And where is the margin sort of versus where other markets are basically to give us some comfort that this is not a weak region for you, basically. No, that's right. I think that to be honest, I think that we have had a structural decline in the Nordic countries for quite some time. Everybody knows that. I don't think that is sort of super increased during the pandemic. It's the same trend basically as we've seen the last couple of years. No change in any way. I mean, we have seen some positive effects now coming from the war in Ukraine. I mean, it's not positive in that sense with the war in Ukraine, but the impact on the discussion on how to protect cash, but also the withdrawals and the activity on cash in Sweden, for instance, but also the other Nordic countries. That has had some pull. It's not like it should have changed pace in Sweden or in Nordics. It's the same, you know, trend we've seen for quite some time. Now when it comes to the margins, I mean, we have very strong margins in the Nordics, and that is due to the fact that we have very strong market positions of course, but also the fact that we have a good mix of quite some, quite a lot of CMS and other, you know, high margin services in the Nordic countries. We have a very good cost base, I would say. The Nordics when it comes to profitability margin percentage terms is very good. That is also a sign that, you know, in our business you can have a bit of decline, but that doesn't mean that you cannot have good margins and that's what you see in Nordics. Excellent. Now in the U.K., you mentioned they are sort of a bit behind the other big markets in recovery. Isn't it also so that maybe in the U.K. the exposure to digital has been more significant on a structural basis? We could have a Nordic situation now going forward in the U.K., which I wonder if it's as consolidated as the Nordics are. I think that in Europe, all markets will consolidate, as we have seen in Switzerland and in Nordics and so on. That goes without saying. I mean, you cannot have a market in Europe with many competitors. That doesn't work over time. Markets will consolidate. It's too early to say about the U.K. There are reports saying, pointing towards what you say, but we also have other, you know, reports saying that, you know, the government and other parts, you know, trying to protect cash or doing a lot to protect cash. It's a bit too early to say. I mean, the country that's been sort of least open, after the pandemic is U.K. We need a couple of more months to see where it's all going. Finally on outsourcing pipeline. I would have been guessing that we should see some acceleration by now. How is it looking? Are there more opportunities around today than, let's say, a year ago or so? No, I think that that is what I was trying to say also in the beginning, that we see if you take the U.S., for instance, I mean, more and more retailers now looking for efficiency, looking to you know, for SafePoint solutions, for instance, or other technology-based solutions like that. That is one sign you know, that you know, the pandemic has sort of you know, speeded up been speeding up these activities. We also see the same thing when it comes to CMS outsourcing that I think that that is going to pick up again now. That's why we're investing so much in the U.S. business now to be able to capture that growth. That will come, has come and will come. I think we're seeing the same, you know, trend in Europe, even though Europe was more affected by the pandemic, that more and more retailers, banks, ATM, companies are looking at outsourcing, looking at efficiency, and we can be there to provide that efficiency. Okay, excellent. Many thanks. Please press star one if you wish to ask a question. Your next question comes from the line of [Ricardo Romito] from One Investments. Please ask your question. Yes. Hi, good morning. Two questions, please. The first one, if we think of the U.S. margin excluding the business expansion cost, are this margin expected to be close to flat year-over-year in Q2 with the price increase fully implemented? I will ask the other one separately, please. Whoa. Yeah, maybe Kristian can. Yeah. I think, when you look into the U.S. margins, I think, now if you compare it year-on-year, it's mainly related to sort of staffing, combination of recruitment costs over time and so on. That will over time decrease, and that means that the margins will increase again. That will not happen. If you compare quarter-to-quarter, you might not see the impact. When you see the year sequentially, we expect the second half of the year to improve compared with the first half. Okay. Maybe with your last point, can you please help us understand how quickly this new business flow will support sales? You partly answered that that is mostly coming in part in Q2, but mostly in the second half of the year. Yeah. I would say that we need to get staffed. You know, we need to get staffed. I mean, there's a great momentum in the U.S. business as we speak already. I can say that if we had been fully staffed, that would be even higher. We need to get staffed. We need to train our people, we need to get the trucks needed, and then we're ready to really capture the potential which is in the U.S. market. We need some more time on that. As I said, there's a good momentum, really good momentum in the U.S. business. Great. Thanks a lot. We have no further questions. Please continue. All right, that's it. That's all. Thank you very much for listening in, and all good questions. Take care. Bye-bye. That does conclude our conference for today. Thank you for participating. You may all disconnect.