Good morning, ladies and gentlemen. Thank you for standing by. Welcome, and thank you for joining the Q4 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 do so by pressing star and one. Press the star key followed by zero for operator assistance. It is my pleasure to turn the conference over to Aritz Larrea, President and Chief Executive Officer. Please go ahead, sir. Thank you very much. Good morning, everyone, and welcome to the fourth quarter presentation for Loomis. My name is Aritz Larrea, and I'm the Chief Executive Officer of Loomis. With me here today, I have our Chief Financial Officer, Johan Wilsby, and Jenny Boström, our head of Sustainability and Investor Relations. I will begin by giving a brief review of our Q4 business performance. I will then review the financials and provide an overview of the year 2023 before taking questions. Let's start the presentation by turning to slide three. Starting with an overview of the market development and how the trends relate to our business, we had a solid performance during the fourth quarter. We continue to see high demand for cash handling automated solutions, and we have had strong growth within SafePoint in both the U.S. and Europe. I'm happy to have the team on board and to be focusing on creating positive sales synergies in this area. While many of our business lines had revenue growth in the quarter, we did see a cyclical volume decline in our international and FX businesses. We are seeing that the higher interest rate environment impacts the demand for storage and transportation of cash and valuables, which has a negative effect on the international business line. Similarly, the high metal prices impacted the gold in our FX business. Globally, equal access to the payment sector is becoming more and more important. We are witnessing an increase in global conversations around the significance of having access to various payment methods, including cash, due to the present geopolitical environment and growing cybersecurity risks. Here we have an important role to play in supporting society with efficient and sustainable payment flows. We're also pleased to see an increasing interest from many stakeholders when it comes to sustainability. The Corporate Sustainability Reporting Directive came into effect at the beginning of 2024, and we are in the process of implementing what will be required of us as a company. Our double materiality analysis will help set Loomis' long-term reports within sustainability going forward. I will share some highlights of initiatives within sustainability during the fourth quarter later in the presentation. 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 7.4 billion, which is the highest revenue ever in a single quarter. The revenue was positively affected by the organic growth as well as the acquisition of Cima. We saw solid organic growth in the quarter, with an increase in all three segments, despite a strong comparable quarter. We also recorded double-digit growth for our automated solutions overall. Our commitment to growing and developing our offer of automated solutions is an important part of our strategy. Our operating margin was 10.7% in the quarter. The U.S. segment had a great performance and successfully continued to implement operational efficiencies. The overall business in Europe and Latin America performed well. However, specific areas within the segment didn't deliver according to our expectations, and we are taking action. Our strong cash flow throughout the quarter resulted in over SEK 3 billion in operating cash flow for the year. Despite certain timing issues during the quarter, we were able to lower our sales, day sales outstanding successfully. For the full year, operating cash flow in relation to our operating profit was 100% for the year, which is a strong number. As we announced yesterday, the board of directors has announced to restart the share repurchase program and repurchase shares for an amount up to SEK 200 million in the first quarter. The board has also proposed an increased dividend to 12.5 SEK per share for the 2023 financial year, equivalent to about 60% of earnings per share, which is at the higher end of the interval within our communicated distribution policy. Let's turn to the next page, where 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 and acquisitions. Revenues increased 10% in the quarter compared to the prior year, and the organic growth was 6.3%. Naturally, we would like to see a rise in margin. However, throughout the quarter, our operating margin did not trend positively. Allow me to continue addressing these drivers in detail in our segments. Let's turn to the next page and start with Europe and Latin. The positive trend in revenue growth in Europe and Latin America continued, where we had another strong quarter. With the impact of the acquisition of Cima, we reached record high revenues of close to SEK 3.6 billion. The organic growth rate was about 4%, and the impact from changes in currency rates was limited. The present macroeconomic climate has negatively impacted our FX and international businesses, which influenced our 9.8% operating margin. In addition to this cyclical impact, we experienced certain operational issues in our FX line of business during the quarter, which negatively impacted our profitability in Europe and Latin America. Additionally, as this is the first quarter with Cima in the group, integration-related expenditures prevented the acquisition from being completely accretive in the fourth quarter. Turning on to the next page and focusing on the trend of both revenue and margin, we see that the total top line growth was 12%. Since the beginning of 2021, we have seen a positive recovery, expanding quarter by quarter in our main markets, and we are now reaching stronger comparisons since 2022 was our big recovery year after the pandemic. Given the lower operating margin in comparison to the previous year, our primary goal for 2024 is to improve and increase our profit margins. Expanding our margin in the Europe and Latin division will need a focus on both efficiency and restructuring strategies. Let's turn to the next page over to the U.S. The strong momentum continued in the U.S. business. Revenues were above $3.8 billion, with a continued increase in recurring revenues. Our revenue related to Automated Solutions and ATMs represents 44% of the U.S. revenue. Organic growth was 6.5% in the quarter, with our Automated Solutions business, with SafePoint achieving double-digit growth for yet another quarter in a row. We reported a strong operating margin of 15%, and the operating income of $578 million is a new record for us. Moving on to the next page and focusing on the trend of both revenue and margin, and here we see the exceptional U.S. business revenue trend during the last three years. While we have benefited from favorable currency rates during parts of this period, I want to stress that our performance in local currency has also been very strong. We were extremely pleased to preserve the margin of 15% from the previous year, which we achieved via structuring our focused approach towards operational efficiency. Let's turn to the next page and 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, and revenues reached SEK 17 million. Transaction volumes increased significantly compared to the previous year and was slightly down compared to the third quarter, following the normal seasonality pattern of the food and beverage market. For the fourth quarter, the increase was 92% compared to the same quarter last year, and we achieved about SEK 1.2 billion in transaction volumes. Let's turn to the next slide, where I will share a couple of highlights on our progress on our sustainability initiatives. We can see that our sustainability-related projects are moving forward, and we are clearly on track towards reaching our sustainability targets for the strategic period. Keeping our employees safe and minimizing the risk of injuries is one of our most important responsibilities. Therefore, I'm also pleased to share that we have succeeded in further reducing the injury frequency rate during the year, and we've continued to strengthen our proactive measures for our employees' well-being. Even with our strong organic growth, we have successfully decreased our carbon emissions from fuel consumption and energy usage in absolute terms. We have invested in a lighter and electrified fleet, smarter route planning systems and technology, which all have contributed to emission reductions and have been beneficial from a cost perspective. We continue to gradually raise our ambitions within sustainability. One such step has been to update our code of conduct for suppliers to reflect not only what we expect from our suppliers in terms of ethics and how they handle their workforce, but to also cover the climate impact and supply chain responsibilities. We have also introduced a global training in diversity for our managers within the organization as part of our long-term initiative to promote fairness and inclusion throughout the organization. I'm very proud of the actions we're taking within the organization and the progress we're making. Let's turn to the income statement slide, where I'll start by highlighting the strong growth we have achieved, both for the isolated quarter and for the full year, where our real growth is 9%. Apart from the remarks I made on the EBITA evolution in the previous slides, there were a few things that affected comparability throughout the quarter. One was associated with the Argentine peso depreciation, and another included the impairment of goodwill in one of our subsidiaries. We also have some costs associated with the restructuring plan in Europe and Latin America for the entire year. We expect to implement the remaining portion of the restructuring plan at the beginning of this year, and you can anticipate that the majority of the remaining restructuring costs will be recorded in our profit and loss statement during first half of the year. I would also like to highlight that the increase in net financial items is largely as a result of increased interest rates. We see the entire impact of the prior interest rate rises in our financial net for the quarter. Since, as you're aware, the majority of our borrowing has variable rates. Moving on to the next slide to highlight our performance in relation to our history. In 2023, we have achieved record revenues with strong year-over-year growth, while our margin is stable on a reported basis. Looking ahead towards 2024, we will continue to drive our growth by focusing on recurring revenue at the same time that we focus on our structural work with operational efficiencies in order to increase our margins. In addition, the positive synergies with Cima will contribute and have a positive impact on our performance. We are thus confident that our business plan and that we will reach our financial targets. Now, moving to my final slide to summarize the full year. We achieved record revenues of SEK 28.7 billion, with an organic growth of 6%, which is solid growth, given that we also had a record year last year. We saw organic growth within our segments for the full year. Thanks to growing revenues and structured work on improving our operational efficiency, our margin increased in the U.S. As I touched upon earlier, there is more to do in terms of margin expansion, and we will continue to execute our efficiency programs and restructuring plans in the coming year in order to reach our target of at least 12% EBITDA margin. In terms of Loomis Pay, both transaction volumes and revenues ramped up this year, and I'm positive that our efforts and investments in Loomis Pay will continue to generate results. We achieved a strong operating cash flow of more than SEK 3 billion for the year, which in relation to our operating profit, was 100%. We have a strong balance sheet with the capacity to continue to make strategic and value-creating acquisitions and distribute returns to our shareholders. Our capital allocation priorities remain, and we aim to use our capital in the best way to generate returns and create value for our shareholders. The board of directors have decided to continue with share repurchases in the next quarter, in addition to a proposed dividend of SEK 12.5 per share. The dividend, which stands for 60% of earnings per share, is at the top of our declared distribution policy. Lastly, we're making progress within our climate-related sustainability initiatives, and in 2023, we further decreased our absolute emissions from transportation by close to 4% compared to the level of last year. As we get more and more electric vehicles on the road and further work on optimizing our routes, we are decreasing our emissions from transportation despite growing our business volumes. With additional solar panel installation projects and a higher share of renewable energy, I'm confident we will achieve our absolute CO2 emission reduction targets while growing the business. As I mentioned before, keeping our employees safe and minimizing the risk of injuries is one of our most important responsibilities. While our efforts have paid off in 2023, we can never be done here, and we will continue to strengthen our proactive measures for our employees' safety. With that, I'm done with my summary of the fourth quarter and full year, so let's turn to Q&A. Operator, we are now open to questions, please. Thank you very much. Ladies and gentlemen, at this time, we will begin the question-and-answer session. If you would like to ask a question, you may press star and one. If you wish to remove yourself from the question queue, you may press star and two. Anyone who has a question may press star and one at this time. Our first question today is from Daniel Thorsson from ABG. Please go ahead with your question. Yes, thank you very much. I start off with a question on the U.S. market here. You have outperformed key peers in the U.S. quite significantly on organic growth in the recent quarters. Is that a pure strength in the growing market in your view, or do you see any slowdown in the U.S. market that could hit 2024 growth rates as competition could rise? No, it's a strength. We see the U.S, as a growing market, and we have a really good service quality position there above our competitors. So we see it as a strength of the market. Yeah, and we should likely see continued growth in 2024, I guess, then. That will continue, yeah. Yeah. Thank you. In Europe, then, you're mentioning that you have some countries not performing good enough. Could you mention some of those and the reasons for that and some actions? So as I said, I mean, in Europe, overall, the performance is solid, but we had challenges in specific parts of the segment, right? We talked about Germany several times now. We have now the right in place. We're going to start the restructuring work there. But what we saw in the fourth quarter is that our operations were negatively affected by the pressure on gold prices, which is something cyclical. So we've also changed the operating model of our FX business, where we're moving away from major currencies only. And let's say our organization was not well fitted for those trends and changes, and as a consequence, we've taken actions in order to address these issues. Excellent. And then the last question here on the margin target, 12% to 14% in 2024. Expectations are not really at 12%, and you did not finish group margin here at 12% in 2023. Where should we expect most of the margin improvements? Is it in the segment Europe or segment U.S.? You mentioned that you could improve both, but the most important here, please. Both will improve. I mean, our focus is gonna be obviously in U.S. growth and continued benefits from operational efficiencies. That will continue. We will probably get the positive sales synergies implemented with Cima, and Cima being fully accredited margin-wise. And then, we need to focus on the European and Latin price increases, operational efficiencies, the restructuring that we haven't been able to execute yet, and try to improve the low to mid margin tier markets. Excellent. Thank you very much, and good luck. Thank you. Our next question comes from KJ Bonier from DNB Markets. Please go ahead with your question. Yes, good morning, Aritz, Johan, and Jenny. A couple if I may. Continuing on, on the previous question, looking at the U.S, I noticed you didn't mention any real problem related to your sourcing of employees anymore. Do you feel that you have the structure now to drive organic growth more forcefully and do it in an efficient way? I would say that we're already showing that. So, I mean, we've been talking that all those labor issues that were in the past, got solved, and we got better, we got staff, we got trained. And I think we've shown in that organic growth already, and we're gaining market share as well. Excellent. On the SafePoint area, is it the right assumption that you grow that business to closer to 60,000 in 1,000 units installs at the end of the year? That is correct. Good news, good news. And looking at Europe, I noticed the impairment charge it took in Denmark at the same similar time as this, your Swedish operation does great. Could you just elaborate a little on what's going on in the two markets where you see such a different kind of things from in the same region? I can start out on Denmark, right? So this is normal that we do impairment test yearly, et cetera. Right now, we came into a position where we had to adjust the goodwill. So it's not really related to the actual market situation per se. It's more a normal impairment test. I don't know if you want to pick up, he had a question on Sweden as well. No, I didn't catch that question. Can you, can you elaborate that question again, please, KJ? Yeah, no, just if you could maybe elaborate a little on if you see very conflicting kind of underlying developments in the different markets making you do that goodwill impact. But I think you answered that already, that Johan, and but then still. Yeah Seeing very good growth coming out of the Swedish market, which I guess is one of the more, most cash agnostic markets you have out there. Correct. Correct. But we've, we've been seeing that positive trend for the last year, I would say. But there's nothing in particular that you want to highlight? No, there's nothing to highlight. No. Good. Just on Argentina also, obviously, coming into the European Latam operation, you still see a business case for driving an operation there in this kind of high inflation environment? Sure. I think Argentina is doing a great performance as well. And I think the country will get fixed somehow. I mean, they did this big change, the big devaluation of 54%, bringing the official rate closer to the parallel rate. And I think this will get better and better, so there's no point on not trusting the Argentine business we have today. Sounds promising. Johan, maybe you could elaborate a little more what's happened with the IAS 29 effect in the financial net relation to the Argentine peso. Yes. So, basically, obviously, there is a, you know, pretty big monetary loss locally from the devaluation. But the accounting framework also states when we consolidate that, we have to use the December rate for all of the year, which more or less sort of takes the whole impact of the full year out. That's why you see zero for the quarter. So those are the effects. I might also add that you probably see that in items affecting comparability, you see the full impact of the devaluation of the Argentine peso when it comes to further up in the results, the SEK 45 million. Excellent. And looking at the underlying financial net, you highlight higher interest costs and higher net debt. Is the level we've seen from the underlying financial net in the quarter representative of what you would see, what we should be seeing in 2024? At least first half, I would say. Obviously, as Aritz said, we were variable, mostly in our portfolio. Yes, we have a pretty sizable leasing component, which is more fixed. But right now we have all the hikes from half to 2023 included in the net. So I think it's a good proxy for the first couple of quarters. Thank you. And just a question also, you mentioned on the working capital that you had a good, good way of working down the days outstanding. Is there anything else that is, impacting this, fantastic release you had on working capital in the Q4, Q4 results? Well, there's some improvement in AR, as we said, but there's also—there's always timing effects between quarters, right? So, you know, that's why we don't look at cash flow generation typically quarter by quarter, but more on a rolling twelve basis. And again, it's a strong 100% cash flow conversion for the year. </transcript Looking for the year 2024, we shouldn't. There is no exceptional, so to say here, that, that you will have coming back and haunting you in 2024 then, so. There's always, there can always be timing differences. So things that is posted now, some of that is coming back in Q1. But if you look again on a rolling twelve basis, I don't see any of those. We normally have, you know, around 80% to 85% cash flow conversion, so this is very strong, right? Yeah. No question about it, very good number. And just on, on Cima as well, I noticed your comment there. Is that, with the comments for inclusion and the upfront cost for the acquisition, you didn't see any contribution in Q4 from Cima? Did I understand that right? ... Not any contribution, but it was not as margin accretive as we thought it would. Yeah, excellent. Those, those integration-related pieces that we mentioned in the report, they are really about, you know, getting them up to IFRS, you know, IFRS standards. It's about also that we are in full speed of getting the positive sales synergies going, i.e., we are starting to procure from them, in a clearly different way already in Q4. When you do that, you sometimes get, you know, you need to eliminate profits in inventory and things like that. Those are temporary differences. All of those are clear basically in Q4 then, I guess, as well? Yes, sir. Aritz, what's your experience so far with the Cima team? It's been a while now that we've been working with them. I'm really positive, supporting us in all markets, US and Europe as well. It looks promising. So I got high expectations, with the work the team is already doing with our operational guys as well. Lovely. And the final one, I saw you did a smaller acquisition also in Spain during the quarter. How does that fit into the structure? That's more of a fintech acquisition on the digital side to support the Loomis Pay offering that we have. There's not much to say. It's a really small acquisition, and it will help us to adapt the product to the Spanish market. Excellent. Thank you very much, and all the best out there. Thank you very much, KJ. Ladies and gentlemen, I repeat, if you would like to ask a question, please press Star and One. Our next question comes from Viktor Lindeberg for Carnegie. Please go ahead with your question. Good morning. Thank you. Following up on the FX business profitability in Europe, you mentioned you're not fully satisfied. It seems to be decaying also when looking at the subsegments, down by about 30% year-over-year in revenue. Can you tell us a bit more about this, and what has happened in this subsegment? Yeah, sorry, I think I mentioned about that. It's all about the operations being negatively affected by the gold prices, basically. And then there's a shift that we've done in the FX business model, trying to move away only from major currencies. And we saw that the organization was not ready for those trends and changes. So, we've taken immediate action, and we will solve those things in short term. Okay, understood. That's clear. And looking at, I think you touched upon this, but the price and the cost going through 2022, 2023, you've been raising prices, but inflation has been stubbornly running high, and thereby you may be a bit behind the curve here. But looking ahead and maybe, hopefully, assuming normalizing inflation levels and your ambitions to raise prices going into this year, can you tell us a bit about the impact that you have seen on profitability the past 12 months or so, and how big of a catch-up this could be if we find a good balance now in the cost versus price mix here? I think we talked about this because, I mean, since mid-2022, we were carrying a lag there between our cost and price. As I said, I mean, the focus in 2024 is gonna be to increase prices. I think by the end of 2024, we should be more or less, we should catch up with that lag that we had coming from 2022. Yeah. That's gonna be one of our main in 2024, in both regions, not just Europe, but also the U.S, as well. Okay. And then could you quantify gut feeling, how big of an impact this has had on your, on your business now, the mismatch? I will keep my gut feeling to myself this time, but I don't want to- Okay. But it's... Victor, the most important thing, it's going to be one of the main priorities for 2024. Okay. And I'm looking at SafePoint Europe, and I'm trying to exclude the acquisition effect from Cima. And maybe you, and this is a nitty-gritty bit for you, but it looks like if I exclude the revenue from Cima, your growth in SafePoint Europe was still 20% organic growth, which is a clear acceleration from what we have seen in the past couple of quarters. So can you just help us sort this out? Is the revenue from Cima fully accounted for in the SafePoint segment? And is this 20% number largely correct, or can you guide us here? You're spot on. I mean, Cima and others are there. Excluding Cima, we did have a double-digit growth in SafePoint in the European market. Okay. And is there any specifics driving this business mix improvement? I think it's my business mix and the focus of the teams on trying to get the automated solutions in our customers. Okay. You have talked about Germany quite a lot, but could you potentially quantify this? How big are the losses in 2023 and in the quarter as such in Q4? Are we talking double-digit negative margins or double-digit negative EBITDA contribution here? So we understand the swing factor in 2024. C onfirm those double-digit, and all I can say here, Victor, is that we didn't have the right team in place. It took us during Q4 to get the right team in place. We said we announced that we were gonna start executing the restructuring plan in Q1. The cost of that restructuring plan, we talked about around SEK 50 million, and then the payback of that is gonna be a couple of years. We're gonna try and accelerate as much as possible, but that's the summary that I can give you on Germany today. Okay. Final billion Swedish krona question from my side is actually about one billion. You're looking at the free cash flow being strong in Q4, but when I, when I sort of look at your net debt end of Q3, it was SEK 8.4 billion, and you had about SEK 1 billion of cash flow. You paid for Cima, and you should have ended up at slightly shy of SEK 9 billion in net debt, but the net debt is now SEK 9.8 billion. So I'm missing a billion here, and I think if anything, FX should have had a positive effect on your revaluation of the balance sheet. So can you help us understand where do I find this billion? I think there is some increases in our leasing side during the quarter as well. We had a fairly large CapEx in the quarter, not on the full year basis, but that probably explains part of it. But I think we're at net debt in relation to EBITA. I think we're at one point seven right now with the acquisition of Cima, with a strong cash flow. So I think we're pretty good, in a pretty good situation, and what we can start out doing in 2024. Yeah. But yeah, I understand the leasing part, but was there any other revaluation of pension debt, or something other, under the hood that we basically can't see in the numbers, but evidently has impacted the net debt quite substantially here? Not in relation to pension schemes or anything like that. Okay. All right, that's all from my side. Thank you. Thank you, Victor. The next question is from Johan Eliason from Kepler. Please go ahead with your question. Yes, good morning. This is Johan at Kepler Cheuvreux. Thank you for taking my question. I was coming back to this restructuring program. You indicated some cost of SEK 50 million. You sort of indicated it's a payback over a few years. I guess that tells me the answer to the savings you're looking for eventually. On tax rate, it was fairly high this quarter and on the full year. How do you see the tax rates in 2024 and forward? I guess it's sort of partly impacted by the losses you have in Germany, for example. It is. So it's really about Q4, so Q4 was at 31%, and it's a kind of a different mix of the earnings before tax in terms of countries. Yes, some challenging countries like Germany impact a bit, and Cima is joining with a slightly higher average as well. And then in last year, we had some positive prior year adjustments, which we don't have now. But going forward, I would, I will keep to the 30% as a good proxy. Okay, thank you very much. Thank you. That was our last question for today, and I hand back to Aritz Larrea for closing comments. Thank you very much for listening in. Please reach out if you have any follow-up questions. Bye-bye. Thank you. Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you very much for joining, and have a pleasant day. Goodbye.