Ladies and gentlemen, welcome to the Loomis AB Q1 2025 Report Conference Call. I am Maira, the call's call operator. I would like to remind you that all participants will be in listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing Star and one on your telephone. For operator assistance, please press Star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Aritz Larrea, President and CEO. Please go ahead. Thank you very much. Good morning, everyone, and welcome to the first quarter presentation for Loomis. My name is Aritz Larrea, and I'm the CEO of Loomis. With me here today, I have our CFO, Johan Wilsby, and Jenny Bostrom, our Head of Sustainability and Investor Relations. I'll start by providing a quick summary of our Q1 performance before taking questions. Let's start the presentation by turning to slide two. Loomis had a solid start to the year with Organic revenue growth of 4.4% in the first quarter, which is revenues above SEK 7.6 billion, with growth across our three reporting segments. Notably, our international business line performed exceptionally well, and we also saw double-digit growth in our automated solutions and FX business lines. Acquisitions had a limited impact on total growth, while currency effects had a slight positive impact. A favorable business mix and increased efficiency resulted in an improved Operating margin of 11.6%, up from 10.4% in the prior year. We have successfully grown the business while reducing our employee count, supporting this margin expansion. Our operating cash flow this quarter was exceptionally strong. In the first quarter, operating cash flow represented 112% of our EBITDA, and over the past 12 months, our cash conversion reached 124%. This performance was driven by improvements in working capital, optimized capital expenditures, and higher EBITDA. Our robust cash conversion enables us to invest in our business and distribute returns to our shareholders. As we announced yesterday, we have signed an agreement to acquire Burroughs in the U.S. The company offers digital and on-site first and second-line maintenance services for, among others, ATMs, Smart safes, and Kiosks. I will present the acquisition in more detail later in the presentation. Our capital allocation priorities remain focused on generating returns. This includes investing in our business, distributing 40%-60% of our net income to shareholders annually through dividends, and making value-driven acquisitions. We will also continue to distribute additional funds to shareholders through share repurchases. Yesterday, the annual general meeting approved the board's proposal for a dividend of SEK 14 per share, totaling a record SEK 959 million to be distributed to shareholders in May. The AGM also decided to cancel 2.5 million of the repurchased treasury shares. Following this cancellation, the total number of shares in Loomis is 68.5 million. Additionally, the board of directors announced the decision to repurchase additional shares for up to a value of SEK 200 million during the second quarter. Now, let's turn to the next page and address our reporting segments, beginning with Europe and Latin America. Our European and Latin America segment had a mixed start to the year, with overall revenue increasing to SEK 3.6 billion, reflecting organic growth of 4.1%. Our international business line delivered a strong performance this quarter, driven by speculation around tariffs. However, revenue from automated solutions declined slightly compared to the prior year, as we're comparing it to exceptionally strong performance from CIMA during the same period last year. Changes in exchange rates negatively impacted our total growth. While our export plans for CIMA to the US have been temporarily paused due to ongoing uncertainties, we remain confident in the long-term potential of this growth initiative. Despite a challenging macroeconomic climate that has affected consumer spending and cash circulation, we increased our Operating margin to 9.3%, up from 8.8%. This improvement reflects our continued focus on profitability. We have taken actions for operational efficiency within our European segment and continue to execute on our communicated review of the European and Latin American portfolio, which is why you see restructuring charges in the quarter. You can expect slightly higher costs of restructuring in 2025 as in 2024. Let's turn to the next page over to the U.S. The U.S. segment delivered another strong quarter, reporting record revenues exceeding SEK 4 billion, with growth across most business lines. Organic growth reached 4.9%, driven primarily by both volume increases. This strong performance was driven by several key factors. Most business lines grew compared to the previous year, except for ATM, which was flat year over year. High demand for cross-border valuable transportation and storage within the international business line has had a positive impact on the growth in the quarter. The automated solutions business, including Safepoint, achieved double-digit growth for yet another consecutive quarter, and we continue to see a robust pipeline ahead. The volume growth within the automated solutions and international business lines, combined with the previously implemented efficiency programs within CIT and CMS, led to a record high operating income of SEK 679 million and a strong Operating margin of 16.6%. These programs have resulted in higher service quality, allowing the segment to capture higher volumes without increased staffing needs. Let's turn to the next page and talk about our new reporting segment, SME Pay. As of the first quarter, the segment Loomis Pay has been renamed segment SME Pay, and in addition to revenues from Loomis Pay, also include revenue within other business lines from new small and medium-sized enterprise customers. Even in a more digital world, cash remains essential, especially for underserved communities. We are committed to maintaining strong cash infrastructure while also expanding digital solutions. By combining both, we help small and medium businesses accept cash and embrace digital tools. Our new reporting segment reflects our growth ambition with our bundled solutions. Revenue from the digital payments of Loomis Pay continues to be reported as the Loomis Pay business line, while cash-related revenue from the bundled solution is reported into either CIT, CMS, or automated solutions. Revenue for the quarter amounted to SEK 30 million, and we saw solid revenue growth with increased transaction volumes within the Loomis Pay business line compared to Q1 2024. We're still in early stages, and digital payments within the Loomis Pay business line stand for most of the segment's revenue. However, I'm confident that we will continue to see growth from our cash-related business lines as well as we advance with our bundled solutions. Now, let's move on to the next slide, where I will share a few highlights on our progress with our sustainability initiatives. Our sustainability-related initiatives are progressing well. Throughout 2024, we have been preparing the organization for the Corporate Sustainability Reporting Directive. We published our CSRD InSPIRE report at the beginning of April and continue to strengthen our sustainability reporting with the ambition to be the leading sustainable partner in our industry. One of our key initiatives is reducing emissions from our vehicle fleet. Following a successful pilot program, we have committed to fully transitioning our entire fleet in the region Île-de-France in France to HVO biofuel. By switching to HVO, we will reduce our Scope 1 emissions without needing to replace our existing fleet of armored vehicles. This change is also beneficial from a resource efficiency and Scope 3 perspective. We will continue to look for similar solutions in other regions as well. I'm also proud to announce that this quarter, we have adopted the United Nations Women's Empowerment Principles. This reaffirms our commitment to promoting gender equality in our industry and providing an inclusive work environment. I firmly believe that empowering our employees is not just important; it is essential. This commitment applies to all employees at Loomis. We are dedicated to fostering an environment where ambition is met with opportunity, ensuring equal support, recognition, and pathways for growth for all employees at every level of our organization. Now, let's move on to the income statement slide, where I will start by highlighting our revenue growth. The growth for the quarter was very solid, with increases across all segments. However, as mentioned earlier, performance varied among the different business lines. We have costs classified as items affecting comparability in the quarter, which relate to the ongoing restructuring in Europe and Latin America. We can see that the financial net has declined slightly compared to the previous year. Now, financial expenses have decreased because of declining interest rates, and the monetary losses from hyperinflationary economies are lower in the quarter compared to the same period in the previous year. It is worth reminding you that while most of our financing has variable rates, our leasing liabilities tend to have fixed interest rates. Moving on to the next slide, I just wanted to highlight our performance in relation to our history. Since the onset of COVID, we have consistently maintained strong financial performance, continuing the positive trajectory established before the pandemic. We have a stable and resilient business model that has proven its strength over time. On a rolling 12-month basis, we generated over SEK 30 billion in revenue and achieved an Operating margin of 12.2%. Looking ahead, we will continue to drive our growth by prioritizing recurring revenues and increasing margins through our structured approach to gain operational efficiencies. This is why we're taking decisive action to restructure the business, ensuring we are well-positioned for the future. Our organization has a proven track record of efficiently managing macro challenges by leveraging our robust risk management and decision-making processes. Our current assessment is that our core business remains unaffected by the introduction of tariffs. Ahead of the announced tariffs, we experienced a surge in demand for our cross-border logistics and storage solutions for gold and precious metals. Given recent developments and the uncertainty surrounding tariff implementation, it is difficult to predict how this situation will develop over time, but we expect these flows to be of one-timer character. Before I open up for Q&A, I'm pleased to share more information on our announced acquisition of Burroughs. The acquisition aligns with our strategy to grow our business through value-adding acquisitions that strengthen our services surrounding our ATM and automated solutions. Burroughs delivers comprehensive services across a wide range of device types in the U.S. and Canada. The company is manufacturing agnostic, ensuring that its solutions and services are adaptable to various types of ATMs, automated solutions, and Kiosks. The acquisition of Burroughs strengthens our ability to provide first and second-line maintenance in the U.S. market. With a total workforce of approximately 600 employees, of which the majority are service technicians, Burroughs has established itself as a leading player in the industry across the U.S. and Canada. In 2024, the company reported revenues of $107 million. Together, we will offer comprehensive full-service solutions within ATM and automated solutions. This will enable us to provide more services to existing customers and expand our addressable market, thereby capturing a higher market share. We have cross-selling opportunities, and by leveraging our combined customer base and also gaining better control of the service supply chain, we're positioning ourselves for profitable growth. Our adjacent services have been instrumental in our growth journey, and we are committed to continuing this trajectory. I am confident in our business and our journey ahead. With that, I'm done with my summary of the first quarter, so let's turn to Q&A. Operator, we're now open to questions, please. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press Star and on on their telephone. You will hear a tone to confirm that you have entered a queue. If you wish to remove yourself from the question queue, you may press Star and two. Questioners on the phone are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press Star and two at this time. The first question comes from Simon Jönsson from ABG Sundal Collier. Please go ahead. Thank you, and good morning all. I have a few questions on the report and then a bit on the acquisition. First here for the U.S., I just wonder if you view the strengths here in Q1 as any kind of one-off. I know you mentioned international that had an impact, for example. The question is, was that material in any way? Otherwise, should we view it as you have sort of taken another step up in margins here in the U.S.? Good morning, Simon. It's not a one-off. Just consider that international for the U.S. market represents like 4% of the revenue. It did have a positive impact, but it's a step up, as you're saying. Okay, great. Thank you for that. Turning to Europe, I think it was a bit softer than expected on the margin side, and you also called it mixed performance. Can you give us an update on how the restructuring initiatives are progressing? I think you launched the plan back in 2023, if I'm right, and you said last year that there's more to do, and now you say that you expect higher structuring costs this year compared to last. Where would you say you are today compared to when you started, and how much is realized, and how much is still potential, would you say? Yeah, the first thing we need to consider here is that the first quarter in Europe and Latin is seasonality-wise the weakest quarter. When you compare to Q1 2024, our margin is actually up in 0.5 percentage points. We had one less working day in 2025 compared to 2024, and we're in the middle of price negotiations still, which is a gradual process. I think that in many markets, I mean, Q1 was affected by weaker consumer confidence, and we also had the tariff thing impacting on the CIMA exports to the U.S., aside from comparing to a strong Q1 2024 of CIMA last year. When it comes to restructuring, it's an ongoing process. I mean, we've mentioned this in the past. We talked about Germany. We had issues there in the past with changes in management, and we had strikes at the end of the year. Now we're actually capable of executing the plans that we have, and so far, so good. We will continue adapting the structure of our countries to the new normal business, so no changes there. Is it fair to assume that you're sort of struggling with some of the same initiatives? Of course, you have also identified new potential initiatives, but is it more that you are? Sorry, I would not say struggling. It is just that some of them have been delayed. That is all. All right. You have also identified some more savings opportunities. Is that correct? Yes, that is correct. Right. Thank you. It is nice to see also that you kept your word on that we should see more about buybacks and M&A here before the summer that you delivered on yesterday. On Burroughs, I mean, you have not shared any historical performance for the company, what I can see at least. Has the company had solid growth historically, or is it more stable, or can you give us any flavors on that? Historically, they have had a very solid growth, and they are in the middle now of a transition to traditional services to more digital and remote services. I think there's a huge opportunity there to keep growing the business, especially bundled with the ATM services that we provide today. When you talk about bundling and all that, is it that you want to create new services, or can you see that you have some overlaps already that you can make savings from, or how should we view that, and what is the underlying rationale? We have overlaps already, but the acquisition of Burroughs, I think the main thing is that it strengthens Loomis' ability to provide first and second-line maintenance to our customers and to future new customers as well. Okay, so mainly new services to existing customers. Is that correct? Yes. In terms of margins, it looks to be dilutive on group level here, at least initially. Over time, do you think it could be accretive, or? Over time, we are sure this is going to be margin accretive. Okay. Thank you. That's all for me. Thank you. The next question comes from Suhasini Varanasi from Goldman Sachs. Please go ahead. Hi, good morning. Thank you for taking my question. I just have one, please. I think you mentioned that the exports of CIMA to the U.S. are being affected by tariffs. Can you maybe help us understand what your original plan was for using CIMA in the U.S. and how that's changing today, maybe in terms of growth or margin prospects? Thank you. Yeah, I think we mentioned about this in the past, but originally in the U.S., we had two main providers for automated solutions, and those two providers were acquired by a competitor in the U.S. Looking for that BCP plan is when we acquired CIMA in Italy. With the increased tariffs, I mean, the price of the goods being exported from Italy to the U.S. was. The goods were going to be more expensive. That makes you less competitive. We waited to see where that is going to end and then adjust our pricing to the current market in the U.S. Originally, we started with the Recyclers solution in the U.S., but we're also planning on exporting staples to the U.S. as well, CIMA staples. You do not see if tariffs persist for longer or for the next, I do not know, one year, 12 months, I do not know. We do not know how long it is going to last, right? Does that have any implications to your growth or profitability of Safepoint in the U.S.? No, we would just have to adjust our cost and adapt to the. It will not be an impact. There will not be an impact. Understand. Thank you. The next question comes from Victor Lindeberg from Carnegie. Please go ahead. Yes, thank you for following up on the CIMA U.S. question here. Can you quantify approximately how much of the revenue in Europe or SafePoint Europe that relates to CIMA sales? Not really at this moment. We've just delayed the start of that export initiative. I think, Victor, I think that the main impact in Europe has been, first of all, the one less working day that we had. I mean, when you look at the comps versus prior year, I think CIMA had an exceptionally strong Q1 last year, as I mentioned. Got it. On Europe, looking at the Items affecting comparability now being a bit on the high relative to my expectations, you mentioned Sweden, Germany, and also France. I think Sweden, we can relate to that. You have a contract expiration in a couple of months. Germany has been ongoing for quite some time. Just to understand, given the revenue scope of that business, it must be quite dramatic costs that you have taken out and continue to take out. Can you just help us understand what are you doing in Germany and maybe any flavor on Sweden? Sure. Starting with Germany, Victor, I mean, we had initially, when we announced that we were going to start restructuring plans there, we had management issues with changes in management at the beginning, and that delayed the whole program, the whole plan. After that, if you remember, end of last year, all the industry had a strike issue at the end of the year, and that also delayed our restructuring plans. I think we're now full speed on the plans there, and we will start seeing the benefits of that moving forward. Sweden, as you said, it's one customer. I mean, just bear in mind that Sweden as a whole represents 3% of the total revenue, but that does not have a huge impact on us. When we talk about France, I mean, we've got three French banking groups that are going to start to roll out shared cash machines in rural areas to better serve places that do not have any other ATM options. This will mean that the number of ATMs will reduce, and as a result of that and changing the market, we need to adapt to all that. That last part on France must be a quite meaningful portion then of your total one-off cost in this quarter. Can you adjust your cost base structurally to this changed number of ATMs in the market, or is this something we need to be mindful of, that this is a one-way road with ATMs out there being in a shrinking mode going forward, so that you will have to take gradual grips in France as we go then? Two questions. First one is, yes, France is the majority of the IAC. That is one. Then take for granted that we can adjust the cost accordingly. Okay. Looking at the Spanish power outage effect now a couple of days, weeks ago, it did change cash behavior quite dramatically, and you also commented upon that. Is it too early to say, but do you see any structural client behavior changes here, or is this going to be a bit of a temporary boost going into Q2 now with Spain as maybe benefiting a bit from this, or was this just a one-off in your book? I think it's still early stages to talk about that. What I can say is that the recent blackout in Spain highlights the critical importance of preserving cash as part of the country's essential infrastructure. I do think it will change a little bit the behavior on the population, and people are more aware on how important cash is. I was there when all this happened, and you could see that cash was the only thing working out there. Got it. I have a couple of questions on Burroughs as well, but I can come back in the call and get back in the Queue for now. Okay. Thank you, Victor. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from Bonnevier from BNP Paribas. Please go ahead. Mr. Bonnevier, your line is open. You can proceed with your question. Your line is open. You can proceed with your question, Mr. Bonnevier. Oh, sorry. I thought I heard something completely different, not my name. Sorry about that. Good morning, Aritz, Johan and Jenny. Just a couple of questions on Burroughs, if I may. Could you give us some sort of baseline for where that company comes in from a profit point of view? And I also see that you have quite a huge potential earn-out in that transaction. What are the milestones that need to be met for that payout? Trying to clarify things a little bit, but what I can tell you is that if you include that earn-out and they achieve that earn-out, that will bring the multiple down. It will be way lower than 6.5. What kind of game plan is it that needs to be executed to do that? I mean, I talked about the transition plan that they have to more remote services, but you need to look into the combination together with Loomis and the cross-selling that is going to take place there. Excellent. Just on the tariff thing, and when you look at the CIMA effect or potential effect on automated solution, is that something that you were planning for in 2026 and 2025? Was going to be a transition year where you phased out the old supplier, or how should we see it, given that you're also talking about a very encouraging pipeline there? One thing that needs to be clear, KJ, and that is we're not phasing out the actual supplier. We're just having secondary suppliers. We've always had that was our intention to have a BCP solution in the U.S. That's the first thing. The second thing is, I mean, obviously, it's early stages. We identified the needs that the U.S. team had regarding automated solutions, and we fabricated a plan that was going to start in 2025. Excellent. Looking forward to seeing the execution on Burroughs. That sounds interesting if you can reach that full payout then, and all the best out there. Thank you very much, KJ. Thank you. Once again, to ask a question, please press star and one on your telephone. The next question comes from Victor Lindeberg from Carnegie. Please go ahead. Yes, thank you. And following up on the Burroughs acquisition, I think you mentioned 10% EBITDA margin simplistically on this business last year, and that's quite a bit lower than Loomis Group. But can you share the EBITDA margin as of last year, or at least a proxy, so that we can model something for 2025, 2026? In addition to that, you mentioned that you expect it to be accretive to margins. Just curious to see how this can be. Is it a very different DNA profile, so depreciation amortization profile, or is it simply taking out costs in having cost overlaps with your existing operation starting there? Let me start on those questions, and maybe Aritz wants to complement. In terms of DNA, if you look historically, they've been running at somewhere between 5% and 6% of sales. Obviously, when you look at how we will drive margins upwards, you need to start out and think about that. We have a very strong organization in the U.S. which are ready to take on acquisitions and how they collaborate and drive new additional business through cross-selling, how we bring things on the inside now with maintenance work, opportunities, and different kinds of addressable markets. On top of that, you obviously have the normal synergy opportunities if you think about supporting functions and so forth. That is how we think about going forward with this. Let me just add one thing, Victor. I think it's important to understand that we are a Burroughs customer today directly and also indirectly, and there are some cost overlaps there that we will need to solve. That's clear. Just curious on that, the synergies, as you mentioned, you're a client, so I guess you may also have some other disynergies here in light of who else they serve in the market, or is it simply just upside opportunity on cross-selling? I think. That you already served your own internal, call it, existing client base, and now you will replace that. I think it's both. I think it's both of them. We cut those cost overlaps by being a direct customer or indirect customer as well. At the same time, the cross-selling gives us huge opportunities on selling a bundled solution to our actual customers and Burroughs' actual customers as well that might not be our customers today. Fundamentally, we get better control of the service supply as well in terms of maintenance. That's clear. Two final questions on Burroughs. Who is selling the company, and can you share any bigger clients of Burroughs by name? It's a private equity. We don't want to disclose more details. The main customers are obviously big banks, IADs, and retailers with the automated solutions. And manufacturers. And manufacturers, sorry. Got it. Thank you so much. That's all from me. Thank you, Victor. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Aritz Larrea for any closing remarks. Thank you very much for listening in. Please reach out if you have any follow-up questions. Bye-bye.