Ladies, and gentlemen, thank you for standing by. Welcome, and thank you for joining the Q2 2023 Report of Loomis AB. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question- and- answer session. If you would like to ask a question, you may press star followed by one on your telephone keypad. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Aritz Larrea, President and CEO. Please go ahead. Thank you very much. Good morning, everyone, welcome to the Second Quarter Presentation for Loomis. My name is Aritz Larrea, and I'm the CEO of Loomis, and with me here today, I have Kristian Ackeby, our CFO, and Jenny Boström, our Head of Sustainability and Investor Relations. I will give a short overview of the quarter and then open for questions. Let's start the presentation by turning to slide number three. We had a solid performance during the second quarter. The business in Europe and LATAM was supported by continued volume growth, and in the U.S., we saw growth across all business lines, and we believe our high-quality services will continue to gain market share. When it comes to Loomis Pay, we're now seeing that our efforts in the recent quarters are paying off in terms of both increased revenues and transaction volumes, where we saw strong growth within all markets. Our SafePoint business has continued to perform well. Our commitment to growing and developing our offer of automated solutions is an important part of our strategy. As we announced a couple of days ago, we are expanding further into this field with our strategic acquisition of Cima. I will come back to this acquisition later in the presentation. I would also like to highlight that equal access to cash and payments is an increasingly important issue globally, and we see more discussions around the world on the importance of access to cash. I strongly believe that everyone should be included in the payment ecosystem, using whichever payment method they wish or are able to use. At Loomis, we provide a vital service by ensuring cash accessibility. We will continue to support the central banks in ensuring equality and inclusion within the payment ecosystem. Let's move on to the next page, where we have the highlights for the quarter. We had a strong performance in the quarter and achieved a revenue above SEK 7 billion, which is the highest revenue ever in a single quarter. The revenue was positively affected by volume growth. We are steadily increasing the recurring revenues from both our Automated Solutions and ATM businesses. The currency movements in the quarter were also favorable. Despite a high comparison quarter, we had solid organic growth in the quarter across all three segments. I would like to highlight here that at the group level, we recorded double-digit growth for our Automated Solutions. When it comes to the operating margin, that was at 10.6%. The margin was positively impacted by increased volumes and efficiency measures, despite the high inflation rates. Our cash conversion was at 36% for the quarter and was affected by the timing in working capital and CapEx. On a rolling 12-month basis, we are in line with our target range of 80%-90%. Even after distributing a record dividend of SEK 850 million to our shareholders, our balance sheet remains strong. Our net debt versus EBITDA, including leasing, is at approximately 1.5 x at the end of the quarter. On a pro forma basis, we expect the team acquisition to add less than 50 basis points. That said, we continue to have a strong balance sheet for further growth, both organically and via acquisitions, and with continued shareholder distribution. Let's turn to the next page. On this slide, you can see how the revenue and the margin have developed over time. We have had a steady increase in our revenue since the beginning of 2021. Including the currency impact, revenues increased nearly 14% in the quarter compared to the prior year. For the quarter, we achieved an operating margin of 10.6%, which is 0.7 percentage points higher than the prior year. Let's have a look at our segments. We switch to the following page and start with Europe and LATAM. The positive trend in Europe and Latin America continued, where we had another strong quarter. We achieved organic growth of more than 8% and reached record high revenues of SEK 3.4 billion. The operating margin is at 10.4%, supported mainly by the higher volumes and efficiency measures. I want to remind you that while we have been diligent in raising prices to share the burden of the higher cost base, if inflation continues at the high level we have seen, we may experience a continued timing effect. The operating income of SEK 353 million is our highest operating income for the second quarter. The announced restructuring plan is ongoing. In the quarter we reported SEK 13 million as items affecting comparability. The total cost for this program is estimated to SEK 50 million-SEK 60 million. The remaining costs are to be expected to be reported in the following quarters. Turning on to the next page and focusing on the trend of both revenue and margin, we see that the actual growth was at 13% when looking at the top-line trend. From the beginning of 2021, we have seen a positive recovery, expanding quarter- by- quarter in our main markets, we are now reaching stronger comparison periods. When compared to the second quarter of the previous year, the operating margin is somehow higher, it is 10.9 when looking at the rolling 12 months. Let's turn to the next page, over to the U.S. The strong momentum continues in the U.S. business. Revenue reached $3.7 billion, with recurring revenue continuing to rise. Our revenue related to Automated Solutions and ATM represents 43% of our U.S. revenue. Organic growth was close to 7% in the quarter. We believe that we are continuing to take market share, where our Automated Solutions business with SafePoint achieved double-digit growth for the 10th quarter in a row. Maintaining our service level is key to keep gaining market share. Therefore, we have kept investing in recruiting and training new staff, along with the higher costs related to overtime. Despite this, we reported a strong operating margin of 13.9%. The operating income of SEK 515 million is also our highest operating income ever for a second quarter in the U.S. Moving on to the next page, focusing on the trend of both revenue and margin, we see the exceptional U.S. business revenue trend during the last two years, while we have benefited from favorable currency rates, I want to stress that our performance in local currency has also been very strong. Regarding the operating margin, we improved the prior year's numbers by 0.7 percentage points. We'll keep focusing on recruitment and retention, as well as on efficiency, to keep improving our margins. In the most recent statistics publicly available, the indication is that the labor market should ease up somewhat during the autumn, which could be beneficial to us. Let's turn to the next page, talk about Loomis Pay. Also, for Loomis Pay, we had a strong revenue growth in all markets, both compared to the previous year and the previous quarter. We have more than doubled the number of live and transacting customers by the end of the quarter compared to the end of 2022. We keep seeing transaction volumes increasing as we move ahead. For the quarter, the increase was 74%, and we achieved for first time a transaction volume above 1 billion. Let's turn to the next slide, where I will share the strategic highlights for our acquisition of Cima, that we announced a couple of days ago. Our automated solutions, with SafePoint as the key product, has been a great success, and continuing to grow this business is an important part of our strategy. We have been looking for the right acquisition within our Automated Solutions business to add technologies and competencies to expand our offer, and Cima is the perfect fit to complement our current business. The dedicated focus on R&D and technological know-how is a great strength of the company. I look forward to welcoming the Cima team to Loomis. Our complementary strengths will allow us to develop groundbreaking solutions which add value to our customers. Cima's global sales network will also provide us with additional growth opportunities and access to new markets. Moving to the next slide is a summary of the transaction details, which you will also find in the press release that we published the other day. We're expecting to close the acquisition during the fourth quarter. It will be consolidated into SafePoint business line, of which approximately 90% will be within the Europe and Latin segment and 10% in the U.S. Through this acquisition, we can accelerate the growth of our Automated Solutions in Europe, but also broaden our offering in the U.S., while of course also prioritizing to deliver a high quality of service for our existing SafePoint portfolio. Let's turn to the income statement slide, where we have highlighted the items affecting comparability, which are related to the restructuring plan in Europe and Latin America. The increase in net financial items is largely a result of the increased interest rates. The majority of our financing is in variable rates, as we've mentioned in the past. Moving on to the next slide, I just wanted to highlight our performance in relation to our history. You can see, also on a rolling 12-month basis, we have achieved record revenues with a continued improvement to our margins and are now at 11.2%. When viewed in relation to our target for the strategy period, ending in 2024 of 12%-14%, we are clearly on the right track. Let's now move to slide 15 to summarize the second quarter. We achieved record revenues with solid organic growth for both Europe, Latin, and the U.S. We increased the margins for both Europe, Latin, and the U.S. compared to second quarter, 2022. Both transaction volumes and revenues ramped up this quarter, and I'm positive that our efforts and investments in Loomis Pay will continue to generate results. With that, I'm done with my summary of the second quarter, so let's turn to Q&A. Operator, we are now open to questions, please. Ladies, and gentlemen, at this time, we will begin the question- and- answer session. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star and one at this time. We have the first question from Suhasini Varanasi from Goldman Sachs. Please go ahead. Hi, good morning. Just a couple of questions from me, please. Loomis Pay revenues has picked up very nicely in the quarter. Can you help us understand how you see the revenues for 3Q? Should we expect a similar sequential acceleration, or maybe you can help us out with exit rates, and then we can extrapolate from there for the month of June? On SG&A, it's very clear inflation is still having an impact in Europe. U.S. is still getting impacted by overtime, training costs. I think you gave some helpful color on, you know, maybe the market expects it to ease by autumn. Is it fair to say that you are still not seeing it sequentially, you know, reducing, it's still sequentially accelerating, the SG&A inflation? Thank you. As we've mentioned before, we expected the growth to be higher at the beginning of the strategic period. We expect that trend. Close to 8% organic growth is a very solid growth for the quarter, and we do expect to continue to show healthy growth in the following quarters as well. You mentioned Loomis Pay, actually, not the rest of the business. Sorry. I was thinking about all the business. For Loomis Pay, during the quarter, we had organic growth of 109%, up to 12 million Swedish krona. We also see an increase in transaction volumes, which is the important driver for the revenue longer term. We continue to focus on providing a stable product and growing transaction volumes in our existing countries. Yeah, I was just wondering if, you know, given this is a summer month holiday period, whether you expect the transaction volume sequentially to accelerate, in this quarter? We do expect the transaction volumes to accelerate. Yeah. Okay, thank you. The next one was on SG&A, actually, inflation, just to understand whether you have seen it sequentially stabilizing or it's still increasing on a month-on-month basis. Can you repeat the question, please? We can't hear you well. Sorry. The inflation on SG&A. You had given some color on the call that the market expects it to stabilize maybe from autumn onwards. I was just wondering, in your cost base at this point, is it still sequentially improving month-on-month, or has it started to see some signs of stabilization? We started to see signs of stabilization. I mean, you know, we have in, especially in Europe, we have that lag, time lag between the larger- Mm. costs, increasing costs and the price increases. I think if inflation keeps high, we will still keep having that lag, If inflation go down a little bit, then we might catch up quicker. Does that answer your question? Yes, it does. Thank you so much. This is both in Europe and the U.S., that you're seeing signs of stabilization or just in Europe? Both Europe and U.S., yeah. Thank you so much. That's very clear. The next question is from the line of Viktor Lindeberg from Carnegie Investment Bank. Please go ahead. Good morning. Morning, Aritz. Thanks for taking my question. I have a few of them, but maybe kick off on three here. Starting on the U.S., the growth, as you mentioned, has been quite high the past number of quarters. It's coming down a bit now, looking at the number of about 6.5% here, but it's still very solid growth in the SafePoint leg of the business. According to my calculations here, it suggests that CMS and the CIT segments in the U.S. are coming down to almost flat volume growth here, year-over-year. When adjusting for the pricing there, of course. Just curious to see what's going on in the market. Any trends that you've noticed, any, you know, anomalies in the quarter weakening throughout the quarter or potentially stabilizing trends? Just to understand the dynamics here in the U.S. Starting off on that one. I think we had a strong growth in the U.S. I mean, you need to consider that we are comparing to all-time high numbers all the time. U.S. didn't have the effect that Europe had with the during the pandemic, and they came up with all-time high numbers, and we're comparing to that. Nevertheless, I don't see the trend that you're seeing. I mean, I see double-digit growth in SafePoint above the rest of the lines, but I don't see any flattening when it comes to CIT. When it comes to CMS, I mean, we talked about outsourcing several times. We've always said that we don't expect the so-called the big bang, but step by step, we do see the outsourcing trend continue, that shouldn't flatten down either. Okay. There's no signs when you look month-by-month in the quarter, that anything is developing south or stabilizing, improving sort of thing? No. Okay. looking at acquisition of Cima here, and obviously, the transaction is not closed. Should we anticipate anything on the integration and acquisition side in terms of the one-off costs here, that we should be mindful of, that's gonna hit the P&L, let's say, Q4, if and when it's consolidated? Any number you could provide us with on- We will not have any significant costs in that integration. All right. no real acquisition cost that's recorded as you go, on a constant basis, I guess, in the P&L? No, this is not like a bolt on, like when we did the Switzerland one. This is more a standalone that is going to support on the revenue and geographical side. Yep. Okay. Finally, on the net financials, they're trending higher sequentially, given interest rates going up, and also you have been refinancing in the quarter. Would you argue that the current run rate level is a good approximation of where you're now running? Do you still have something being, call it, gradually churned up to higher interest rates now, assuming obviously, that interest rates prevail at the current level? No, as stated before, we have majority variable rates, as you know, so it will fluctuate if the interest rate goes up. Otherwise, I think it gives you a good indication. If you look into the number net from monetary loss in relation to our net debt of SEK 8.5 billion, that gives you an indication about the interest rate. Yep. All right, thanks guys. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star and one on your telephone. Next question is from the line of Karl-Johan Bonnevier from DNB Markets. Your question, please. Morning, Aritz and Christian. Morning. First, looking at the you mentioned still the access to skilled employees, so to say, and then hiring. Is that still keeping you say, missing out growth opportunities, you feel that you don't, you don't get access to enough employees at this stage? No, I can tell you, I mean, the labor market has eased a lot in the U.S. We're very close to being fully staffed there. We don't see the same issues that we had in the past when it comes to recruiting and hiring people. It's just a matter of timing and to get those people trained, and that takes time, but nothing else. It's the question of getting the efficiency out of the new structure, basically? Correct. Yes. Yeah. I see that international growth continues at a very good level. Is that what is driving that for the moment? I think it's mainly the FX business. In the international business, that's partly related also to the small, minor acquisition we did earlier in AIB Express. Oh, you mean in the U.S.? I'm sorry, yeah. What, could you share any customer feedback from the launch of Loomis Pay in Spain? Is it has been well received, or? We talked several times about that. I mean, the Loomis Pay in Spain is progressing. I mean, we launched fourth quarter last year with the sales team in place. It's still early stages, and we keep continuing building up the sales team. We already have a sharp growth in revenue and transaction volumes this quarter, and it has a good acceptance from the merchants, so we need to be positive there. When you look across the Nordics, where I guess now you have a slightly more developed base on the Loomis Pay side, which kind of client verticals are the ones that you feel that you get the best penetration in? We're mainly focused on Food & Beverage when it comes to the Nordics. Food & Beverage. Excellent. Just coming back also to Cima, it looks to be a very straightforward and good acquisition. How much of this would you call it being a defensive kind of this acquisition, considering what GardaWorld did with Gunnebo and similar things that I guess I want to to some extent focused on your current suppliers to your Automated Solutions? Now, the acquisition of Cima is a strategic move to expand product offering and with Automated Solutions in line with the communicated strategy of adding new technology and competencies to complement our existing business. I think Cima brings a proven track record of innovation and R&D within cash automation and complements Loomis in terms of both product offering and technological solutions, as well as geographical presence. That said, this vertical expansion also has the added benefit of securing supply and visibility into the supply chain. It allows us even to be closer to the product development. Again, I mean, it's not, it's not, it's a strategic acquisition to expand product offering into new markets, but not to replace existing suppliers. Excellent. Looking at the development in SafePoint, obviously very encouraging, still looking at the high growth rate. You haven't had any issues on, say, the production partnerships, right, or anything like that has hampered it? Nothing at all. Excellent. Thank you very much, and all the best out there. Thank you. The next question is from the line of Peter Testa from One Investments. Please go ahead. Hi. Two topics, one on Cima and the other on price cost. Just to maybe continue what you were saying on Cima, please, could you talk a bit about where you think in your business, the Automated Solutions that Cima offering can work out, can help you? I mean, the extent to which would help with the penetration of different services that can align with SafePoint in Europe, and the extent to which you can maybe bring Cima to the U.S. Yeah. Cima has a wide offer of back office solutions, of smart safes and recyclers, as well as front office solutions. The smart safes are quite similar to our current SafePoint solutions. Where we truly expand our product offer is in the front office solutions, which has not historically been a focus area, but where we see that there is a large potential. In large aspects, the functionality is like other devices. Well, one important differentiation, though, is the technology and know-how, which will be beneficial for our future development of new product offerings. We can complement our solutions to make a unique offer for our customers. We do believe that the combination of us and Cima will also accelerate the growth for our Automated Solutions in Europe, as you said. Okay. do you Is there an adaptation phase to take to bring Cima into the U.S., or are they already present in the U.S.? They are present. Actually, 10% of their sales are in the U.S. Right. Okay, thank you. The other questions were just on the price cost question, one on U.S., one on Europe. If you look at the U.S., could you give us some sense as to how overtime hours have been trending through the year as you go, kind of sequentially, month to month, from the start, the extent to which you see that changing as a trend or what the trend is, please? We started the year, the trend was upwards when it comes to overtime in the U.S., and then, these last months, it has continued downwards. It's trending downwards. We need to keep working on efficiency to keep it getting lower. Great. Okay. The other was just on Europe. You talk about the gap in time between wage and price. I was wondering if you could give some sort of sense as to how pricing is working through in Europe, and the extent to which it is recovering under or over-recovering in different geographies, the cost, the wage cost. Yeah. I mean, you all know that the price increases are usually take place in the first half of the year. Mm-hmm. We have negotiated the majority of the contracts now to cover the increased cost that we've had in the last year and this year, and have seen the effect of these coming in the second quarter. That said, if inflation continues at this level in Europe, we will likely see a time lag in price versus cost increase going forward. As I said before, over time, we should compensate that. Right. You're saying your price increases this year have been somehow a bit great at catching up for the second half of last year and the start of this year. They should earn their way through as the rest of the year. Okay, that's fine. Great. Thank you very much. Yeah. Thank you. Thank you. We have a follow-up question from Viktor Lindeberg. Please go ahead. Thank you. Looking at the cash flow and CapEx, it seems that your investments have been going up quite a lot in this quarter. Any color you could share on the elevated or new level of investment, and what is behind this, perhaps? Starting on that one, out of two questions. Well, I mean, if we talk about the CapEx for this quarter, mainly it's been investments on premises in the U.S. If you want to mention about the trend? If you, if you look into the trend in the CapEx, if you look, like, we're more closer to 6%, a little bit above 6% year- to- date. That is sort of the low end of the range where we have been historically, and I think we have also earlier said that we expect to be in the lower end of where we have been historically on the CapEx side. It's correct, like you said, you see a timing of approximately SEK 200 million in the quarter, which, of course, has a big impact in the quarter on the cash conversion. Like Aritz also mentioned earlier today, if you look rolling 12, we are in the bracket of 80%-90% that we have said that we expect in a longer term perspective. Okay. more timing effects than that you have actually started to increase the absolute revenue, let's just say? Yes, correct. Yeah. Okay. Looking at the different markets in Europe, you provide a number of markets, the sales settlement. It seems that Spain is doing well, and France is also doing very well. I'm a bit puzzled, actually, by Sweden, the weak phenomenon. Maybe if you could provide something on Sweden that stands out. As I think I've asked in the past as well, just double checking again, Switzerland and the U.K., they are coming in very weak. If anything you could mention on the U.K., Switzerland, and Sweden, that would be helpful. Thank you. Yeah. When it comes to U.K., I would say that we have been more selective when it comes to which contracts we have to ensure that have a good profit level. In the, in the Swiss side, with a sharp increase in interest rates, the volumes of cash and valuables in storage have declined. I think those two explain that. When it comes to Sweden, I will talk about the Nordics in general. Again, it's good to see that there are ongoing discussions around availability and acceptance of cash, and we have seen cash usage increasing in those countries. Also, Viktor, to mention on the, on the organic growth side, I know that from last quarter as well, that you calculated your assumption or your calculation around the organic growth for Switzerland and U.K. Maybe we can also have a look at that this quarter, because it's important now to have in mind that in Loomis, we have changed the accounting method for currency, which is also mentioned in the report. We are using average rate, which is the most common method to use, than historically, as you know, we have used closing rates. Just as a heads up on that one. That's how we're impacting the numbers, yeah. Yeah, yeah. Maybe we can have that offline. Yes. Maybe that brings the final question relating to Sweden, I think it was actually November last year, the first time one of your biggest clients have been talking about insourcing their contract from having had a very long and trusted relationship with you. Now it's being confirmed, I think this week, that they are insourcing this volume and building their own infrastructure. This is not something shorter term, but in two years from now, you will be, in Sweden, losing quite significant volumes. How will this be addressed from your side and the magnitude that we should be mindful of here? I mean, as you know, we can never comment on the specifics of our relationship and contract with our customers. We constantly adapt our operations to changing market conditions, and we will optimize the resources that we use to make our operations efficient. We remain committed to the Swedish market and our role in ensuring that cash is readily available and that flows of cash are functioning in society. We see that's positive that the Swedish banks want to support cash in society in Sweden today. All right. Thanks, guys. Thank you. We have another follow-up question from Karl-Johan Bonnevier. Please go ahead. Yes, Aritz, just a couple of mine follow-ups as well here. Just, on the cash flow as well, you mentioned working capital also being more timing effects in the quarter. Is that, something we should see coming back to normal levels already in the second half of this year or sliding into next year? That's usually, we expect that to come back in the second half of this year. You see it on the other line, and that is usually where we also have this impact from the cash stock, which was positive in Q1 and is negative in Q2. We expect that to sort of come back to lower levels at the end of the year, because also currency has the peak of the volumes in Q2 and Q3. Excellent. Just one final one as well. Looking at share buyback opportunities for you, obviously, you mentioned the very strong balance sheet of the group, and then if cash flow is coming back as you highlight to a stronger degree again in the second half of this year. Is there any limitations from a more, say, overrolling level for the board to go for a continued share buyback opportunity for the moment? We aim to continue to generate return to our shareholders. The decision to repurchase shares is a board decision. Once you take into consideration the large acquisition that we just announced now, Cima and our record high-rate dividend that was paid out during the second quarter, I think we will continue to focus on our shareholder distribution and capital allocation. While we may not announce a share buyback program every quarter, our capital allocation strategies remain. Excellent. Thank you very much. So far, there are no further questions, and I hand back to Aritz Larrea for closing comments. Thank you very much, so all for listening in. I wish you all a nice summer, and if you have any questions, please reach out to us. Bye-bye. Thank you. Ladies, and gentlemen, the conference is now concluded, and you may disconnect. Thank you very much for joining, and have a pleasant day. Goodbye.