Loomis (LOOMIS) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached SEK 7,624 million, with 5.5% organic growth and all-time high EBITA of SEK 981 million and margin of 12.9%.

• All segments contributed to growth, with double-digit gains in Automated Solutions and Loomis Pay, while International business faced cyclical headwinds.

• Strong operating cash flow at SEK 1,314 million (134% of EBITA), with SEK 200 million in share repurchases completed in Q3.

• Restructuring in Europe and Latin America ongoing, with SEK 59 million in related costs and management changes announced for 2025.

• Currency effects negatively impacted results, and margin targets for the full year remain challenging due to restructuring delays.

Financial highlights

• Q3 EBITA rose to SEK 981 million (814), EBITA margin improved to 12.9% (11.0%), and net income was SEK 481 million (421); EPS before dilution at SEK 6.92 (5.92).

• Operating cash flow conversion at 134% for Q3 and 122% on a twelve-month basis.

• Issued inaugural EUR 300 million sustainability-linked Eurobond under the EMTN program.

• SEK 200 million in share repurchases in Q3, with a new buyback program of up to SEK 200 million authorized for Q4.

• Lower effective tax rate expected due to U.S. EV rollout tax credit and one-time estimated tax credit.

Outlook and guidance

• Full-year EBITA margin target of 12%-14% remains within reach but is increasingly challenging due to restructuring delays.

• Expect more restructuring benefits in Q4 2024 and early 2025, with 70% of savings materializing in 2025.

• Price increases expected to be lower in 2025 as inflation moderates, but cost pass-through to customers remains feasible.

• Bankomat contract in Sweden (30% of Swedish business) to be insourced mid-2025, expected to be cost neutral.

• Management remains committed to further margin improvement, operational efficiency, and strategic M&A.